Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Oral Answers to Questions — SOCIAL SECURITY

The Secretary of State was asked—

Benefits Agency Staff

Dr. Norman A. Godman: How many staff are employed in Benefits Agency offices (a) in Inverclyde and (b) in Scotland as a whole; and what was the equivalent figure in (i) 1990, (ii) 1993 and (iii) 1996. [83991]

The Secretary of State for Social Security (Mr. Alistair Darling): At 30 April 1999, the number of BA staff employed in Inverclyde was 242. The number in Scotland was 6,966.
I am unable to provide further information in the form that my hon. Friend has requested due to district reorganisations. Unfortunately, the figures for Scotland are not available for 1993. Before 1990, there was no Benefits Agency.

Dr. Godman: Those recent figures sound encouraging enough. Jack Martin and his team of officials have my respect, especially the local customer relations officers, Liz McArthur and Margaret Mitchell, but I have received representations concerning the number of doctors and support staff who carry out medical examinations to determine the award of incapacity and other benefits. Is it true that their number is still too low for the number of examinations that they have to carry out? I hope that my right hon. Friend will dismiss the idea that the Sema Group, which carries out that work for the Benefits Agency, is screwing down the number employed to maximise profits. That would be detrimental to our constituents, who have to wait far too long as it is for such medical examinations.

Mr. Darling: We keep the number of medical staff throughout the country under review. I am not aware of there being a particular problem in Greenock or in the surrounding area, but I will happily look into it for my hon. Friend.
My hon. Friend may be interested to know that we are recruiting 64 members of staff as part of the new single gateway to the benefits system. One of its pilot projects is operating on the Clyde coast, so he will know about it. I thank him for his compliments to the staff; I know that he has written to them and has been extremely supportive of everything they do. They appreciate that.

Benefits Fraud

Dr. Stephen Ladyman: What progress has been made in improving co-ordination between the Benefits Agency and local authorities in combating fraud. [83992]

The Minister of State, Department of Social Security (Mr. Stephen Timms): There is good progress on a range of fronts. We have earmarked funding in each Benefits Agency area to help to build stronger links with local authorities. Last month, the Benefits Agency and local


authorities were invited to submit joint proposals for projects to tackle fraud together. Service level agreements are in place giving each party a clear statement of how co—operation should work in practice. Among other initiatives, we have, so far, installed more than 300 remote access terminals to allow local authorities access to Department of Social Security benefits data.

Dr. Ladyman: I thank my hon. Friend for that answer. Is he aware that Thanet district council has recently been commended by the benefit fraud inspectorate for its work to prevent and to detect fraud? That accolade was earned after much hard work and as a result of being able to put resources into fraud detection and prevention, which includes co-operation with the Benefits Agency. If the system of weekly benefit savings is to be replaced, will he assure me that the new system will continue to provide councils such as Thanet with the resources that it needs to co-operate with the Benefits Agency and to invest in such fraud detection and prevention?

Mr. Timms: I can give my hon. Friend that assurance. I commend the achievements of Thanet district council in tackling fraud. Indeed, I commend the efforts of my hon. Friend, who was the chair of finance at that local authority when the lamentable record of the Conservative administration at Thanet was being turned round.
A commendation from the benefit fraud inspectorate is based on careful and thorough analysis; it is not lightly given. Last week, I visited the BFI headquarters and was able to see for myself the thoroughness and detailed preparation that go into its important work in all the local authorities that are inspected.
As in the case of Thanet, the WBS—weekly benefit savings—system has encouraged local authorities to allocate adequate resources to the detection of fraud. That is to be welcomed. We will continue to use WBS with local authorities for some time yet, but we also need to encourage work on prevention; WBS focuses on detection. That is the central purpose of the verification framework, and we are funding local authorities £100 million to implement it.

Mr. Edward Leigh: One of the best ways in which to combat fraud would be to automate the payment of benefits, but that has been the subject of a long-standing dispute between the Department of Trade and Industry and the Department of Social Security. Will the Minister honestly say what has happened to the ICL contract? We gain lots of information from unattributable briefings to the press. Will he come openly to the House and explain what is going on?

Mr. Timms: There have been a number of delays with the Horizon project and against that background, the Government commissioned a substantial review of the project, which began last year. Everyone involved—ICL, Post Office Counters Ltd, as well as the Department of Social Security—has been looking again at the project to find a way in which everyone can make a commitment to it. I understand that we can expect an announcement about it from the Secretary of State for Trade and Industry later today.

Minimum Pension Guarantee

Helen Jones: What estimate he has made of the number of people in Warrington, North who will benefit from the minimum pension guarantee. [83993]

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): We estimate that approximately 2,000 pensioners will benefit from the minimum income guarantee in Warrington, North. The increases in income support rates for pensioners will mean that, this year, in real terms, a single pensioner could be approximately £160 better off.

Helen Jones: I am grateful to my hon. Friend for that reply. Will she tell the House whether it is the Government's intention that, if possible, the minimum pension guarantee will be uprated in line with average earnings? If so, does it not highlight the contrast between the Government's policy of protecting the poorest pensioners, and the Opposition's policy of abolishing that minimum income guarantee?

Angela Eagle: My hon. Friend is right to point out that the Government's priority is to protect the most vulnerable pensioners, which is why we have been focusing money on them in the way that I have just described. She was also correct to have noticed that the Chancellor announced that we intend, next year, to uprate the minimum income guarantee in line with earnings.

Mr. Julian Brazier: Will the Minister confirm that, under those arrangements, according to which the minimum income guarantee is pegged to earnings, whereas the basic pension is pegged to prices, the proportion of people in Warrington, North and across the United Kingdom who are dependent on means-tested benefits will rise indefinitely year on year?

Angela Eagle: The hon. Gentleman talks about means testing, but omits to mention that, in 1979—when the Tories took control of Government—16 per cent. of all benefits were means-tested whereas, in May 1997, when they were finally driven from office, that figure had risen to 34 per cent. Therefore, we need absolutely no lessons from Conservative Members about means testing. The hon. Gentleman should remember that the Government's priority is to ensure that we get help now to those who need it now. The minimum income guarantee will focus real extra resources on those who need them most.

Mr. Steve Webb: May I transport the Minister to Warrington, North, in the year 2064—which is the year in which constituents of the hon. Member for Warrington, North (Helen Jones) who are born this year will reach state pension age? Will the Minister confirm that, under current policy, the combined value of the full basic state pension and the full state second pension for those people will be below the value of the proposed minimum income guarantee? Does she accept that that proves that the Government's policy is unsustainable?

Angela Eagle: The hon. Gentleman should stop transporting in time, and start examining the very important changes that we are making to pension


provision to ensure that we float off means-tested benefit all those who work a full working life—plus people who care. The state second pension will achieve that goal.

Mr. Bob Blizzard: May I welcome the proposal in the pensions Green Paper to examine ways of helping pensioners in Warrington, North and elsewhere whose small second pension takes them just above income support levels and therefore just beyond eligibility for the minimum income guarantee? Many of those pensioners feel that, despite their modest savings, they are little or no better off than those who are on income support and qualify for other benefits. Will my hon. Friend say when the Government might make such proposals?

Angela Eagle: My hon. Friend is exactly right to say that, paradoxically, those who have small occupational pensions and find themselves just above income support levels often end up worse off because they do not receive passported benefits. It is a very difficult issue of public policy, which we are examining. As he will know, we have announced a review of the capital limit, and shall make an announcement on that when we are able to do so.

Benefits Fraud

Mr. Michael Jack: When he last reviewed his target for the reduction of benefit fraud for the year 1999–2000. [83994]

The Secretary of State for Social Security (Mr. Alistair Darling): For the first time, we have set a measurable target for reducing fraud and error. Our target is to reduce the level of fraud and error in income support and jobseeker's allowance by at least 30 per cent. by 2007, with at least a 10 per cent. reduction by March 2002.

Mr. Jack: I am grateful to the Secretary of State for that answer. Pursuant to the reply, a moment ago, of the Minister of State—on the ICL computer project, and the fact that an announcement on it may be made today—may I have the Secretary of State's assurance that, whatever the outcome of his deliberations on a project which has a key part to play in the fight against fraud and inaccuracy, Britain's 23,000 sub-postmasters and postmistresses will continue to have an opportunity to play a key role in the front-line fight against fraud?

Mr. Darling: Yes, I can give the right hon. Gentleman that assurance. Later today, my colleague, the Secretary of State for Trade and Industry, will be making a statement on the matter—

Mr. Leigh: To the House?

Mr. Darling: No, he will not be making it to the House. [Interruption.] I can tell the right hon. Member for Fylde (Mr. Jack) that the problem with the project—which we inherited from the previous Government—is that it is three years late, and that its costs were being overrun. Because of that, my colleagues and I conducted a lengthy review of the project to ensure that we had a system that reduced fraud and errors while helping to safeguard the post office network for the future. I am

pleased that we have reached an agreement between all the parties. It is a good deal for the Post Office and an extremely good deal for the Benefits Agency.

Mr. Eric Forth: On a point of order, Madam Speaker.

Madam Speaker: Order. I cannot take points of order until the end of Question Time. [Interruption.] Order. The right hon. Member for Fylde (Mr. Jack) knows what action he can take if he finds the answer unsatisfactory.

Mr. Dale Campbell-Savours: My hon. Friend the Minister of State referred to the benefit card. Did my right hon. Friend the Secretary of State read the interesting article in The Sunday Times yesterday that suggested that the national identity card that some of us have been calling for might be announced in the near future? Might that be true, and has the Department of Social Security had any influence over any decision that might be forthcoming?

Mr. Darling: I read lots of things in the newspapers, some of which are true and some of which are not. That matter of policy is the responsibility of my right hon. Friend the Home Secretary.

Mr. Iain Duncan Smith: The Secretary of State talks about the pathway project knowing that his Department has had a massive involvement in it, but he gives us no information on the situation. Briefings have been given to the Daily Mail, as we saw on Saturday, and to The Independent, in which the Government have deliberately undermined the programme. A written answer by the right hon. Member for Birkenhead (Mr. Field), when he was a Minister, gave no indication of any problems. He said that the programme would be up and running by the end of the year 2000. Last week, the current Minister of State said the same. Now we are told that the Government are going to make a statement, but not to the House. Will the right hon. Gentleman tell us the current situation on the programme? Let us hear the answer here first.

Mr. Darling: I think that we have had enough of the hon. Gentleman's synthetic anger about this. Let me repeat that this is another example of our discovering, on coming to office, that a project begun by the previous Government was not working. It was running three years late. That is why we had to review it to ensure two objectives. The first is to safeguard the post office network, which we have done. That is the responsibility of my right hon. Friend the Secretary of State for Trade and Industry. The second was to ensure that we can make payments as effectively, cheaply and efficiently as possible to Benefits Agency customers. We have sorted out the mess. If the hon. Gentleman wants further information in the House or elsewhere, it is perfectly possible for him to get it through the usual channels, as he knows full well.

Mr. Duncan Smith: The usual channels have twice produced anodyne answers, such as the statement that the programme is due to go ahead with no problems. Never has there been an admission of a problem in a written answer. The Government are prepared to brief the press


about problems, but not once do they say anything to the House. Will the Secretary of State take the opportunity to pledge at the Dispatch Box that, as a result of whatever decision that the Government make, pensioners and disabled people will still be able to receive their full range of benefits, as was the plan, through local post offices?

Mr. Darling: Yes of course they will, as they can at the moment. I repeat that the project was three years late and was not working. That is why the Government had to review it. We have had long discussions with ICL, the supplier. The hon. Gentleman would hardly expect those discussions to be taking place on the front pages of the newspapers.

Mr. Duncan Smith: The right hon. Gentleman briefed the papers.

Mr. Darling: The hon. Gentleman must contain himself, particularly when he is making wild and unsubstantiated allegations. We are acting in the best interests of the Benefits Agency and the post office network to ensure that we get payments into the hands of people who are entitled to them, to reduce the amount of fraud and error in the system and safeguard the post office network. When people see the announcement later today, they will understand that we have protected the public interest, unlike the Conservative party.

War Pensions

Mr. Andrew Dismore: What plans he has to improve the take-up of war pensions among ex-service personnel and civilians injured by hostile acts in world war two. [83996]

The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): We are committed to ensuring that those who are entitled to war pensions receive them and we are actively looking at ways of improving our communication with ex-service men, such as the use of a claims telephone helpline.
Take-up is assured for those ex-service men who leave the forces on health grounds and for the families of those who die in service as, under arrangements between this Department and the Ministry of Defence, neither they nor their widows have to claim. In addition, the War Pensions Agency will arrange for a member of its welfare service to visit any recently bereaved widow of a war pensioner within 15 days of a request to do so and help her make any appropriate claim.

Mr. Dismore: Does my hon. Friend share my experience from constituency surgeries, which suggests that many veterans or civilians injured in the second world war who did not claim war pensions at the time, but who now find that their injuries are becoming more severe as they get on in years, may not be aware that they are entitled to claim those pensions? That is particularly the case among civilians who were injured. Will he pay particular attention in the review to trying to bring those rights to the attention of those affected?

Mr. Bayley: The war pensions scheme for civilians applied only to the second world war and is now largely finished. The scheme had a time limit for claims of three

months from the date on which the injury causing the disablement was sustained; however, the Secretary of State has the discretion to waive that limit in certain circumstances. These days, 50 years after the end of the war, we still get a small number of applications each year for such waivers to be made. That facet of the scheme, as well as all other parts of it, is advertised as widely as possible through leaflets and posters in some 13,000 outlets around the country. The scheme is also advertised in every telephone directory, and in many other ways. We always look to make sure that those who are entitled to a war pension have every opportunity to claim and receive it.

Mr. Nicholas Soames: Is the hon. Gentleman aware that probably the best network for reaching war widows and others who may be entitled to war pensions is via regimental and corps associations? Will he confirm that, in addition to the work that his Department does with the Royal British Legion, it tries to ensure that all the regimental associations, which do so much for the welfare and benefit of old comrades and their families, are kept fully in touch about the benefits to which those people are entitled?

Mr. Bayley: I can confirm that we work with the regimental associations, and we issue leaflets and posters to regimental museums. We make sure that all those who leave the armed forces are given information about how to claim, should they need to do so at some time in the future.

Mr. Eric Pickles: The hon. Gentleman will be aware that there is a degree of confusion at the heart of Government about the relationship between war widows pensions and housing benefit. He will recall that, on 20 May last year, at column 952 of the Official Report, the Prime Minister, in response to a reasonable question from the hon. Member for Thurrock (Mr. Mackinlay), promised a review of that relationship. This year, on 12 May, at column 315 of the Official Report, I asked the right hon. Gentleman what had been done about that review, and was given a contradictory answer. The following day, the Leader of the House gave another contradictory view, saying that responsibility for the matter had been transferred to the Deputy Prime Minister. Will the hon. Gentleman give us a definitive reason why nothing has happened in a whole year, despite the Prime Minister's promise? Is the indecision of the Government final on this matter?

Mr. Bayley: The hon. Gentleman is as well aware as I am—not least because of his links with Yorkshire and the campaigning of the Yorkshire Post—that the discretion lies with the local authority in that matter. As a member of my Department, I know that, under the law as it stands, the discretion lies with the local authority.

Benefits Take-Up

Mr. David Kidney: What steps he is taking to ensure that all pensioners receive the benefits to which they are entitled. [83997]

The Minister of State, Department of Social Security: We are particularly concerned about pensioners being worse off than they need to be because they are not receiving the help to which they are entitled through the minimum income guarantee. The pilot projects that we set up last year were designed to test new ways of identifying potential beneficiaries and the best way of encouraging them to claim. We will examine the results when they become available and make proposals as soon as we are in a position to do so.

Mr. Kidney: Does my hon. Friend agree that the minimum income guarantee's future reliability depends on ensuring that pensioners claim the income support to which they are entitled? Is he aware that South Staffordshire district, part of which lies in my constituency, was one of the pilot areas? Can he confirm that often pensioners who do not claim their income support entitlement nevertheless claim other help, such as council tax benefit and housing benefit? Will he instil into all Benefits Agency staff the approach that pensioners who come to them who are entitled to receive income support will indeed receive it?

Mr. Timms: My hon. Friend is absolutely right: the minimum income guarantee is an entitlement. Like him, I am interested in the fact that more people seem willing to claim council tax benefit and housing benefit, even though they are means-tested, than are willing to claim the minimum income guarantee. There are some important lessons for us to learn. We look forward to the results of the pilots in his area and in others so that we can find out what those lessons are.
Members of Parliament should take the opportunities that we have to point out to people that the minimum income guarantee is an entitlement. Tomorrow morning, I shall participate in a virtual conference for older people, on-line with older people throughout the country, taking advantage of the fact that many of them are internet users. I have no doubt that the minimum income guarantee will be one of the many subjects raised.

Mrs. Caroline Spelman: I am sure that many hon. Members will have received visits in their surgeries from pensioners rendered very anxious by the extension of means testing to incapacity benefit, widows benefit and other basic state benefits, through the introduction of the minimum income guarantee. How does the Secretary of State intend to deal with the disincentive to save that the measures will produce?

Mr. Timms: There is no disincentive to save. We want to ensure that even the least well-off pensioners in our society can share in the benefits of rising national prosperity. The increases in the minimum income guarantee this year and next will mean an extra £250 a year for a single pensioner on income support, and up to £400 for a couple in which one partner is over 80. Those are large sums that can make a significant difference to the least well-off pensioners in our society.
Through the state second pension, in combination with the minimum income guarantee, we are ensuring that all those who work and contribute throughout their lives will, when they retire, receive an income above the level of the minimum income guarantee. Those two measures in

tandem mean that we can ensure that there are good incentives to save but that the least well-off pensioners will share in our rising national prosperity.

Mr. Malcolm Wicks: Does my hon. Friend have a recent estimate of the number of elderly people not claiming means-tested income support? Are there any early indications—either virtual or non-virtual—from the pilot schemes? What is the target for the number not claiming that entitlement in 10 years' time? Does he agree that if we are to have a genuine pension guarantee we must find more sensitive and effective ways of ensuring that every person who is entitled to income support—many are in their 80s or 90s—actually gets it?

Mr. Timms: I have much in common with my hon. Friend on this point. We estimate that between 400,000 and 700,000 pensioners are entitled to the minimum income guarantee but have not claimed it. We are reviewing the figures, and we expect to have revised figures by the summer. We are considering a range of approaches to the problem. It is interesting to note that in some areas the take-up of housing benefit and council tax benefit is as high as 95 per cent., but the take-up rate for the minimum income guarantee among the same population is a good deal lower.
We are not setting a target for the take-up in 10 years' time, but we are anxious, through new methods such as telephone claims, which will make claiming easier, to ensure that as many pensioners as possible receive the minimum income guarantee to which they are entitled.

Mr. Quentin Davies: My hon. Friend the Member for Meriden (Mrs. Spelman) referred to anxiety caused to pensioners by Government policies. Will not much more gratuitous anxiety have been caused to millions of pensioners who collect their benefits from post offices, and to post office staff, by the Secretary of State's reluctant admission just now at the Dispatch Box, which was dragged out of him by my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), that the pathway project was facing problems? There were two disgraceful, unsatisfactory and unacceptable aspects to that admission. First, if it is true that there had been problems for several years, why was my hon. Friend given a deceptive parliamentary answer last week on the pathway project that did not mention any problems? Secondly, why did the Secretary of State say that the answer to the question will be given not by him but by some other Minister in a different context? The people of this country will begin to wonder why we waste our time with Question Time if this Government intend systematically to bypass Parliament.

Mr. Timms: It is Conservative Members who are doing the scaremongering. My right hon. Friend the Secretary of State dealt fully with the point. My right hon. Friend the Secretary of State for Trade and Industry is responsible for the Post Office and that is why he will make the announcement later today.

Student Housing Allowances

Mr. Tam Dalyell: What representations he has received on housing allowances for students from (a) Scotland and (b) England. [83998]

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): We have received several representations concerning students' entitlement to housing benefit. Most full-time students are not entitled to housing benefit because they are supported through the educational maintenance system. Certain students in vulnerable groups, such as lone parents, can claim benefit.

Mr. Dalyell: In the light of the complex constituency case that was brought to the attention of my right hon. Friend the Secretary of State during his visit to the excellent Bathgate office of the Department, and in the light of the background with which my hon. Friend the Minister is familiar, is there any hope of improvement in the situation of those mature students who are, rightly or wrongly, dependent to some extent—possibly completely—on housing allowances for the continuance of their education at institutes of higher education where they are well received?

Angela Eagle: I am aware of the constituent's case to which my hon. Friend refers. He wished to take a full-time course, but had he taken a part-time course, he would still have had access to his housing benefit. He had been unemployed for three months which rendered him ineligible for new deal, which might have given him the opportunity to do a full-time course and still have access to benefit or to undertake training for work, for which an individual must be unemployed for six months. The training opportunities are focused on periods of unemployment of six months or two years to give assistance to those who have fallen out of the labour market to try to make them more employable. However, I hear what my hon. Friend says and we will bear it in mind during our review of housing benefit.

Miss Anne McIntosh: Has the Minister made an assessment of how many students will be eligible for housing allowances and benefits when the introduction of tuition fees takes effect? May I assure the House, Madam Speaker, that I am not a Labour rebel, as I was described in a leading newspaper last week, but that I am and remain a Conservative loyalist?

Angela Eagle: I am sure that the hon. Lady was glad to get that off her chest. Newspapers seem to think that any women Member of Parliament must be a Labour Member. I wonder why that is. I am not certain what point the hon. Lady was making about housing benefit. The only people who are entitled to receive housing benefit if they are studying are those in vulnerable groups. Lone parents qualify, but others would not.

Severe Disablement Allowance

Mr. Christopher Fraser: If he will make a statement on the proposed changes to severe disablement allowance. [84000]

The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): The proposed changes to severe disablement allowance will give more help to those with the greatest need.
Young disabled people under the age of 20—or under 25 in the case of higher education students or trainees—will be given access to incapacity benefit without having to satisfy the usual contribution conditions. As a result, after one year on benefit, they will gain by up to £26.40 a week.

Mr. Fraser: The Government set up the disability benefits forum last year, but 12 major charities with interests in disability and severe disability have since resigned from it. How does the Minister explain that? The forum was described as giving the disabled a "pivotal" role in shaping policy. How does he intend to replace those important charities?

Mr. Bayley: Naturally, I regret that the charities withdrew from the forum. They have made an important contribution to the development of the Government's welfare reform proposals on disability benefits although, ultimately, there were areas of disagreement. That is perfectly obvious to the House, and it would be extraordinary if a Government followed each and every proposal made by the charities. Any hon. Member who had read the representations made in response to the consultation document would form that view, not least because on many occasions the charities argued for different things.
However, the Government will retain the working groups. They have been extremely useful, for instance, in shaping the alternative to the benefit integrity project. Those working group meetings continue and remain useful. The Government will stay in close touch with all the bodies representing disabled people, such as Mencap, which remained in the forum. It is important that we are in dialogue with those organisations.

Mr. David Bendel: Does the Minister accept that the abolition of severe disablement allowance will hit especially hard those who in early adulthood have caring responsibilities for children, for people who are disabled, or for elderly parents? Such people often are unable to make national insurance contributions, and so are not eligible for incapacity benefit. If their marriage partners have incomes of their own, they probably will not be eligible for any means-tested benefits either. Is it not rather unfair that people who, through no fault of their own, become incapacitated after several years of looking after other people will get no recompense for their loss of earning capacity?

Mr. Bayley: If we were doing nothing for carers, the hon. Gentleman would be right, but we are doing a great deal for such people—as I should have thought the hon. Gentleman, who sat through the Committee proceedings on the Welfare Reform and Pensions Bill, would know. For example, we have taken the decision that all carers entitled to incapacity benefit will carry that entitlement through the period that they receive invalid care allowance for as long as is required. Also, carers will be credited into the state second pension. That will mean that, for the first time, people who forgo a job to care for a relative or some other person will not be left in poverty in retirement as a result.

Mr. Dafydd Wigley: Does not the Minister accept that disabled people, and organisations of


and for disabled people, know most about their own needs? Does he not accept that the overwhelming weight of evidence given to the all-party disablement group and other Members of the House is against the Government's proposals? Last week's vote on the Welfare Reform and Pensions Bill indicated that there are grave reservations among Labour Members on this matter. Will the Government therefore think again when the Bill goes before the House of Lords?

Mr. Bayley: I wish the right hon. Gentleman would read the representations from the charities and other voluntary bodies in response to the Government's consultation document. They welcomed many of the things that the Government are doing. For instance, they strongly welcomed our decision to raise people who are disabled at birth or early in life above the level provided by the severe disablement allowance. Whereas 70 per cent. of those people used to be left on means-tested benefits for life, we are providing that they should be passported on to incapacity benefits. That will leave them about £26 a week better off.
The representations also welcomed our decision to extend the higher rate mobility component in disability living allowance to children of three and four years of age. The right hon. Gentleman should look at what the charities say, as they welcome most of what the Government propose.

Mrs. Theresa May: As another female Conservative Member of Parliament, may I point out to the Minister how pleased I am to do something that too many of the Blair babes hardly ever do—stand up for disabled people and women? The Minister responded rather coyly to my hon. Friend the Member for Mid-Dorset and North Poole (Mr. Fraser), saying that there had been something of a disagreement between the former members of the disability forum and the Government. It was not just a disagreement: the disability organisations thought that the Government had got it wrong. We think so too, and so do 67 of the Minister's hon. Friends. When will the Government wake up to reality? Their changes to disability benefits are not the right thing for disabled people, but a betrayal of those people.

Mr. Bayley: There are few enough women Members on the Conservative Benches. It will not have escaped the memory of Members who were here before the general election that a woman Conservative Member tabled dozens of amendments to wreck a Bill, introduced by my hon. Friend the Member for Kingswood (Mr. Berry), which would have extended civil rights to disabled people. For Conservative Members to pose as people who support disabled people's rights is a travesty of the truth, and disabled people and the voluntary bodies which represent them know it.

Mr. David Winnick: Does my hon. Friend remember how, in the previous Parliament, a Labour private Member's Bill to help the disabled was so badly wrecked by the Conservative Government that the daughter of the then Minister for the Disabled disowned what was being done, and the Minister himself resigned

soon afterwards? Did not that incident show the Tory Government's total contempt for disabled people, and does it not expose the Tory party's present hypocrisy?

Mr. Bayley: It was a Labour Government who introduced the Commission for Racial Equality to provide civil rights for people regardless of their race. It was a Labour Government who introduced the Equal Opportunities Commission to do the same in respect of gender. The Conservatives blocked civil rights for disabled people, so it is a Labour Government who are introducing legislation that will set up a Disability Rights Commission to guarantee civil rights for disabled people.

Housing Benefit

Mr. Chris Mullin: What plans he has to increase local authority discretion in respect of the payment of housing benefit; and if he will make a statement. [84001]

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): We have announced our intention to publish a housing Green Paper later in the year. A modern housing policy should ensure that everyone has the opportunity of a decent home. The Green Paper will discuss options to address weaknesses in the current system of housing and housing benefit within our overall objectives for welfare reform.

Mr. Mullin: Is the Minister aware that, in many areas, housing benefit has become a subsidy for some of the worst landlords? The interests of both taxpayer and tenant might be better served if local authorities were given some discretion over which kind of landlords were eligible to receive housing benefit. I appreciate that my hon. Friend may tell me that the benefit goes to the tenant, not the landlord, but she knows that, although that happens in theory, in practice the money often goes directly to the landlord without touching the tenant's pocket.

Angela Eagle: My hon. Friend makes an important point, and we will consider it in our overall review. In November 1997, we introduced more discretion for local authorities to stop direct payment to landlords who are not fit and proper. That allows local authorities to enter into dialogue with local private sector landlords to ensure that correct standards are maintained, and to raise standards in some cases.
I hope that local authorities will take the new power seriously and use it where necessary. I have visited some local authorities that respond proactively to the local private sector by holding meetings to ensure that standards are correct. My right hon. Friend the Minister for Local Government and Housing recently published a consultation document on the regulation of houses in multiple occupation. My hon. Friend is on to something, and we are aware of the improvements that need to be made.

Mr. John Wilkinson: When the hon. Lady says that her hon. Friend is on to something, it is the understatement of the year. Is he not on to one of the biggest frauds and rackets in the administration of public money? How can the public have confidence that action


will be taken? The previous Secretary of State, the right hon. Member for Camberwell and Peckham (Ms Harman), said in the House that the Government
"will bring forward proposals … shortly"—[Official Report, 19 March 1998;Vol.308,c.1436.],
yet we will not necessarily get a Green Paper until the end of this year.
Ought not the Government to name and shame those local authorities in which there is maladministration of the system? The Audit Commission found clear evidence of fraud on the part of either elected representatives or officers in a quarter of the local authorities that it visited. That is a national disgrace.

Angela Eagle: I welcome the hon. Gentleman's realisation that the housing benefit system, which was created by the previous Conservative Administration, is in need of much improvement. I also note, although it was not quite an apology, his indirect admission that in creating housing benefit and ensuring that its administration was fragmented to 409 different local authorities, particular difficulties of administration were created. Some local authorities administer the housing benefit system superbly and some do it very badly indeed.
One question that we are considering is how we can raise the standard of the worst to the best. We have already done a lot with respect to fraud. We have set up a simplification and improvement project, which has reported to the Prime Minister, to find out how we can make a complex system easier to understand and administer. We will continue our drive to improve standards in that area.

Mr. Peter L. Pike: As my hon. Friend the Member for Sunderland, South (Mr. Mullin) said, the biggest ripper-off of public funds is the landlord who buys a cheap terraced property in a constituency such as mine for £5,000 and can pay for it with housing benefit within 18 months. That is an abuse of public money and it needs clamping down on and stopping.

Angela Eagle: It is that sort of matter that the review of housing policy and benefit will be considering. We will be publishing a Green Paper later in the year. We are as aware as anyone of some of the bad administration and the rip-offs that occur as a result of the system that we inherited. However, I caution hon. Members that we are talking about the roof over people's heads, so we have to be careful how we change a system on which many millions of people rely. We will do it, and there will be a lot of consultation around the Green Paper. We are serious about reform, but we must not underestimate the complexity or the seriousness of the issues that face us as we approach the publication of the Green Paper on housing policy later this year.

Benefits Fraud

Mr. Eric Forth: If he will make a statement on his policy for the detection of organised benefit fraud. [84002]

The Minister of State, Department of Social Security (Mr. Stephen Timms): We have a national team of highly trained investigators in the Benefits Agency


security investigation service, which exists to counter the threat of organized fraud. I visited its office in Manchester recently and was impressed with what I saw. Last year, just over 650 cases were accepted for prosecution as a result of the service's work. In addition, we have commissioned an independent review of the Government's approach to tackling organized fraud in social security, which will report in the autumn.

Mr. Forth: Why is the London organised fraud investigation team being wound up?

Mr. Timms: Because of serious concerns about the way in which it operated. We are learning the lessons from that experience. That is why, in February, I asked John Scampion, the commissioner of the social fund, to carry out a review of our approach to organised fraud. He is extremely well placed to carry out the work owing to his familiarity with the benefits system—he was the local authority chief executive at Solihull for 18 years.
This is an area in which we in the Department need to work together with local authorities. Of course, the problem also affects the private sector. Last week, I joined the Association of British Insurers for the launch of its fraud web site, which has a link to the DSS fraud web pages, which gave me a chance once again to promote the need for all of us who are affected by fraud to co-operate in tackling it.

Mr. Frank Field: As the Government have promised an announcement later today on the benefit card, and as one of the reasons for it was that it should act as an effective measure against fraud, does my hon. Friend have to hand the figures for the savings that taxpayers would have made had ICL delivered it on time? If not, can he make them available in the Library before the end of the day?

Mr. Timms: I do not have the figures to hand. If they are available, I shall ensure that they are placed in the Library.

Mr. Desmond Swayne: Does the Minister understand that virtual reality is no answer to the staggering amount of fraud in the system? Why are the Government reducing investigation and the emphasis on detection? Does he believe that detection and prevention are incompatible?

Mr. Timms: No; that is nonsense. We are not reducing the effort at all. We are making sure that there is proper attention to prevention, and not just detection. That is the basis of the strategy that we published in March. We are measuring the amount of fraud in the system systematically for the first time, and we will reduce it. Through such measurements, we will be able to demonstrate that we are reducing it, as the hon. Gentleman will see.

Minimum Pension Guarantee

Mr. Jeremy Corbyn: What estimate he has made of the cost of linking the minimum income guarantee for pensions to average earnings. [84003]

The Secretary of State for Social Security (Mr. Alistair Darling): We intend to raise the minimum income guarantee for pensioners in line with earnings as resources allow, so that even the least well-off among today's pensioners can share in rising prosperity. We have pledged to raise it in line with earnings next April and estimate that that will cost an additional £220 million.

Mr. Corbyn: As the Secretary of State accepts the need to raise the minimum income guarantee in line with earnings, does he not accept that the basic state pension should also be raised in line with earnings, instead of being raised only in line with prices, which means that pensioners are significantly worse off than they were when the Tories broke the link? Should not the Government at least redress that imbalance?

Mr. Darling: No, I do not agree with my hon. Friend, because that would not help the poorest pensioners. I have made it clear in the House before that the Government's priority is to address a major problem that we faced on coming into office: the fact that many pensioners live on very low incomes. That is why we are investing more than £4 billion over this Parliament. The new minimum income guarantee for pensioners targets help on the poorest pensioners. We have increased the winter fuel allowance fivefold, to £100, for every pensioner household, starting this winter. We have also reformed pensions in the long term, particularly through the new state second pension, which will greatly increase the pension that low earners can accrue during their lifetimes.
The Government's strategy is to do far more than ever before to help pensioners who have lost out because of the policies of the previous Government. My hon. Friend's proposal would benefit middle and some higher income pensioners, but poorer pensioners would not benefit at all, which we want to avoid. I believe that the Government's strategy is right because it does more to help the pensioners who need help most.

Mr. Peter Viggers: Why do Ministers continue to say, more in hope than belief, that there is no disincentive to save? I am sure that the Secretary of State saw the reply to the parliamentary question that I tabled earlier this month showing that a single pensioner receives £60 a week more if he has done nothing to save for his retirement than someone who has savings of more than £16,000. The accumulated facts show that it would cost £43,000 to buy an annuity with that return. [Interruption.] Those facts were revealed in an answer given by the Minister of State, who is even now briefing the Secretary of State. Does not that mean that people must save £43,000 or not bother at all? Is not that the most massive disincentive to saving?

Mr. Darling: No. The hypothesis behind the hon. Gentleman's question is unrealistic. Pensioners in the position that he described would have a SERPS entitlement that he seems to have ignored. Let me deal with the minimum income guarantee, which is what he is complaining about. As I understand it, in so far as the Conservatives have a policy on welfare, they are against the minimum income guarantee. That would mean that 1.5 million pensioners would lose out immediately.
The Government's clear priority is to help the poorest pensioners. If the hon. Gentleman does not accept that, he must accept that the logic of what he says is to remove

the support that we give them so that they would be poorer still. Most people would think it right to help pensioners who, often through no fault of their own, are on very low incomes. That is why we increased the minimum income guarantee, which will mean that some pensioners will gain £160 in real terms—something that the Tory party would have denied them.
The Tory party has to come clean with people; if Tory Members are against the minimum income guarantee, they must be in favour of reducing the income and the living standards of 1.5 million pensioners.

Maternity Costs

Siobhain McDonagh: What plans he has to assist mothers with the costs of maternity. [84004]

The Parliamentary Under-Secretary of State for Social Security (Mr. Hugh Bayley): We are extending maternity allowance to women who earn £30 a week or more and increasing it for self-employed women, who currently receive less benefit than employed women. The existing social fund maternity payment will be replaced with a sure start maternity grant from April 2000, and doubled from £100 to £200 for each child.
Those improvements will give low-earning mothers-to-be some financial help towards the costs of a new baby, enable them to take their full entitlement to maternity leave and help them to achieve a better balance between work and family life. It will be good for their standard of living, good for their health and good for the health of their babies.

Siobhain McDonagh: Is my hon. Friend aware of how widely welcomed the extension of maternity allowance to less well paid women and the new maternity grant have been? Does he agree that that will allow less well-off mothers to stay in touch with the workplace? Will he assure the House that his Department will do everything that it can to be involved in the Government-wide plans for family-friendly policies in the workplace?

Mr. Bayley: I thank my hon. Friend for raising those issues. This package of policies demonstrates joined-up Government at its best. People widely welcome the doubling of maternity payment from £100 to £200. People should also be aware that the person claiming has to be in touch with health professionals, so that individuals can obtain advice on how to bring up their new child. Those improvements are welcomed throughout the country and throughout the House by everyone apart from Conservative Members who, last week, voted against the extension of maternity allowance.

Benefits Fraud

Mr. Derek Twigg: What plans he has to minimise fraud in the administration of housing benefit. [84005]

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): "Safeguarding Social Security", published in March, makes it clear that we are developing a benefit system that is secure from start to


finish. We have already taken a number of steps to make the administration of housing benefit more secure. Those steps include providing £100 million to fund a rigorous programme of checks by local authorities on the authenticity of claims. We have also introduced a scheme, in conjunction with the Royal Mail, to prevent fraudsters from redirecting postal payments.

Mr. Twigg: I thank my hon. Friend for that answer. The previous Government did nothing about benefit fraud. Is not the level of fraud that we inherited from that Government unacceptable? Will my hon. Friend do all that she can to work with local authorities to ensure best practice; and, more important, will she ensure that that best practice is spread throughout local government?

Angela Eagle: My hon. Friend makes a perfectly valid point. Some local authorities are extremely good at administering housing benefit, while others fail and fall below the kind of standard that we would expect. My right hon. Friend the Minister for Local Government and Housing is introducing best value pilots, which will include housing benefit and will set—[HON. MEMBERS: "Ah."] Conservative Members seem to think that sitting there and sneering about the Government's plans is somehow—[Interruption.]

Madam Speaker: Order. Members on the Opposition Front Bench must remain silent while the answer is being given. I want no running commentaries from them—or from Members on the Benches behind them, for that matter.

Angela Eagle: Thank you, Madam Speaker. The hooligan element has taken over the Tory party; all Tory Members can do is sneer—they have no policies.
As I was saying before I was so rudely interrupted, the best value pilots will set benchmarks of good administration for housing benefit that can be followed by other local authorities. We have also included housing benefit and council tax benefit in the new work-focused single gateway pilots. We have been carrying out some prototypes between local authorities and the Benefits Agency to improve administration. Those prototypes have resulted in spectacular improvements, so we are considering how we can spread that throughout the whole country.

Sir Sydney Chapman: Further to the point made earlier by my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), will the Minister confirm that a recent Audit Commission report shows that, in no fewer than 25 per cent. of local authorities visited, the commission found evidence of fraud committed by officers or members of the local authority? Does she agree that that disgraceful situation should be addressed urgently, ahead of other reforms to the housing benefit system?

Angela Eagle: If the hon. Gentleman had read the rest of the reports, he would realise that they both compliment the Government on the progress made in detecting and reducing fraud. I agree that such an incidence of officer or councillor fraud is utterly unacceptable, and we are producing a whole strategy to deal with it. Perhaps he should sit back and reflect on how he went through the Lobby and helped the Tory Government to create a housing benefit system that is so fragmented and fractured that it is extremely difficult to administer efficiently.

Freedom of Information Draft Bill

The Secretary of State for the Home Department (Mr. Jack Straw): With permission, Madam Speaker, I should like to make a statement about freedom of information, on which I have today published a draft Bill and consultation paper. Copies are available in the Vote Office.
In December 1997, the Government published a White Paper entitled "Your Right to Know". I pay tribute to my right hon. Friend the Member for South Shields (Dr. Clark) for his work on that document, which underpins the draft Bill. I am also very grateful to the Select Committee on Public Administration for its consideration of the White Paper's proposals.
In drafting the Bill, we had to strike a careful balance three ways, between extending the public's access to information, protecting citizens' own privacy, and preserving confidentiality where disclosure itself would be against the public interest. That has been a difficult balancing act, but I think that we have got it right. The scales are weighted decisively in favour of openness, and the proposals will radically change the relationship between Government and citizens.
The proposals are not merely about abstract rights, to the benefit of academics, historians or constitutional theorists alone, important though all those are. The proposals will benefit everyone and provide access to the sort of information that people really want to know: parents will be better able to find out how schools apply their admissions policies; patients will be able to understand how hospitals allocate resources between different treatments and how they prioritise waiting lists; and citizens will be able to find out more about the actions of their local police force.
Under the Bill, for the first time, everyone will have the right of access to information held by bodies across the public sector. There will be a duty on public authorities to adopt a scheme for the publication of information about their work; a positive duty on authorities, even where they are not obliged to provide such information, to consider disclosure on public interest grounds; and a new Information Commissioner, together with a new information tribunal, to enforce the rights which are created.
Let me now explain to the House how the draft Bill compares with the White Paper's proposals. On which bodies are to be covered, the Bill's proposals are a little wider than those of the White Paper. All the functions of the police and police authorities are to be covered as the Select Committee proposed, with specific exemptions for information which is gained as part of an investigation or which relates to informers. The security and intelligence agencies, now together with the National Criminal Intelligence Service, will remain outside the scope of the Bill. We are discussing how Parliament can be included without prejudicing parliamentary privilege.
Unlike the current code, the White Paper promised access to specific documents and actual records—the Bill delivers that promise. Applicants for information may express a preference for the means of communication of the record: inspection of originals, a copy, or a summary of the information that is sought.
The White Paper set out seven areas to be covered by exemptions, together with other information that would be excluded from the Bill. It also set out conditions on the right of access. The Bill delivers broadly the same exemptions as the White Paper, but the tests involved do differ.
As to policy advice, there was never any expectation that Cabinet documents, inter-ministerial correspondence and official papers on developing policy would ever be disclosed under a freedom of information regime. As the White Paper said:
Now more than ever the Government needs space and time in which to assess arguments and conduct its own debates with a degree of privacy.
Moreover, it is worth bearing in mind the fact that the product of such private deliberations is almost always a public announcement of policy.
Under the Bill, there will be a class exemption for the formulation of Government policy in place of the simple harm test in the White Paper, which we believe will achieve the same purpose in a more straightforward way. The White Paper proposed a substantial harm test to cover six specified interests in addition to policy advice, which was to be covered by a simple harm test. After careful consideration, we reached the view that a single omnibus substantial harm test could not work properly for the range of exemptions proposed. What is or may be "substantial" in relation to law enforcement may not be so in relation to international relations. We believe that the harm concerned must be capable of being interpreted in relation to the subject matter that it is designed to cover.
Therefore, where national security is an issue, the test now proposed is whether the exemption is required for the purpose of safeguarding it. Where the health and safety of an individual is at issue, the test now proposed is whether disclosure would or would be likely to endanger the physical or mental health or safety of an individual. Elsewhere the proposed test is whether disclosure would or would be likely to prejudice the criteria set out in the relevant exemption.
These tests will result in a more open regime than under the existing non-statutory code of practice. Under the code, the test is the possibility of harm being caused. Under the draft Bill, the test is a higher one of probability. Generally, the Information Commissioner will have the power to substitute his or her judgment as to disclosure for that of the public authority. He or she will be able to ensure that public authorities are not able to claim that prejudice would be caused in circumstances where this would be trivial or frivolous. The prejudice has to be real, actual or of "substance". In respect of policy advice, the commissioner will be able to challenge the reasonableness of a Minister's decision against disclosure.
There are two areas where the White Paper suggested that a harm test would apply where in fact such a test turns out to be impractical: these are personal information and information supplied in confidence. First, the disclosure of personal information is governed by our obligations to comply with the European Community data protection directive and the European convention on human rights. The convention and directive do not provide for the application of a harm test, and we cannot therefore unilaterally provide for one ourselves.
Secondly, we believe it would be wrong to overturn in the Bill duties of confidence that arise at common law. Those doing business with public authorities have the


[Mr. Jack Straw]
right to ensure that their confidences are respected. In many cases, public authorities need access to information held by others, which they in turn will be prepared to release only if given an undertaking of confidentiality. Where information is supplied to a public authority in those circumstances, the public authority should not be required to disclose it if that would constitute a breach of confidence actionable by the supplier of the information.
Let me turn now to the enforcement provisions for the new regime. An Information Commissioner will enforce the regime, and there will be rights of appeal against decisions of the commissioner to a tribunal, with a further appeal, on a point of law, to the courts.
The Select Committee on Public Administration said in its report that there was a need for coherence between the data protection regime and the freedom of information regime, with a "simple and comprehensive" right of access to each. We agree. Many requests for information will be for a mixture of personal and general information. We shall therefore merge the office of the Data Protection Commissioner with that of the Information Commissioner.
The cost of all the proposals when fully implemented is forecast to be between £90 million and £125 million a year. A task force to assist implementation, under the chairmanship of my right hon. Friend Lord Williams of Mostyn, has been established. The Bill is compatible with the requirements of the European convention on human rights.
The Bill will now be subject to extensive consultation with the public and Parliament, including the Select Committee on Public Administration.
I have spoken today of the need to balance rights. There is a right to know, a right to privacy and a right to confidentiality. For too long, we have given insufficient weight to the right to know. The proposals in the draft Bill seek to redress that balance.
This Government have done more than any other to open their workings to greater scrutiny by the public. In our manifesto, we promised a programme of constitutional reform to get citizens more closely involved in the decisions that affect their everyday lives. We have delivered, as promised, a Scottish Parliament and a Welsh Assembly. We are bringing rights home through the Human Rights Act 1998, and today we are taking forward our pledge on freedom of information.
I commend these radical and balanced proposals to the House.

Sir Norman Fowler: Before responding, I must declare an interest as a journalist and chairman of a regional newspaper company. I hope that, on this occasion, the Home Secretary has heard that declaration.
We welcome the fact that the Home Secretary has chosen, on this occasion, to make a statement on the Floor of the House. I hope, however, that he is aware that, after the past two years, many Members of the House, not all of them Conservatives, will need persuading that the Government have their heart in freedom of information.

Mr. Ronnie Campbell: rose—

Sir Norman Fowler: I do not think that I should take an intervention at this point.
The one action by the Home Secretary that we remember above all others was his obtainment, earlier this year, of an injunction against the whole of the British media to prevent publication of a few paragraphs of the Macpherson report, which was, in any event, to be published a few days later. Will he explain to the House how he squares that with all his words about freedom of information?
Our concern is increased not only by the fact that the clause that sets out the exemptions to freedom of information is the longest in the draft Bill and that the exemptions go way beyond national security, but by the fact that, in one vital respect, the test for withholding information has unquestionably been made easier. The White Paper proposed the test based on the question
"will the disclosure of the information cause substantial harm?"
The Home Secretary is now proposing a test based on the question whether disclosure would or would be likely to prejudice matters set out in the exemption in question.
Does not that mark a retreat from the White Paper and a reduction of the test in the previous Government's code of conduct, and was it not argued against inside Government by several Ministers, including the Lord Chancellor? In the lengthy negotiations in Whitehall, have not the Government Departments and the civil service won the battle in what they regard as a damage limitation exercise?
I have some questions about specific details of the statement. Is the Home Secretary saying that none of the submissions that come to Ministers will be available for publication, even though many of them are factual statements of the position in a particular policy area? Has he rejected any substantial change to the 30-year rule, given that it has clearly broken down in many respects? Will he say more about the costs of the new system? He said in his statement that they would be between £90 million and £125 million. Will the Government reimburse bodies such as the police, or will costs go where they fall?
Above all, will the Home Secretary confirm that the Government could and should become more open without any legislation? I remind him of the way in which he personally blocked all questions about the leak inquiry concerning the Macpherson report. Does he remember that, on 4 March, I asked him not for the identity of those who were to be interviewed, but whether Ministers, officials and special advisers would be interviewed? His written reply stated:
It would not be in the interests of the leak investigation now under way to give these details."—[Official Report, 4 March 1999;Vol.326,c.855.]
That does not sound like a Minister who is committed to freedom of information.
How will the Bill affect the Government's refusal to disclose the fact that a European Union Committee is considering nearly 200 taxes—twice the number previously thought—for tax harmonisation? Is it not strange that the Dutch Finance Ministry confirmed that freely over the weekend, while the Treasury yesterday told the press that it was "confidential"?
Our aim will be to make this legislation effective, but if the Government want more openness in public bodies, they must take the lead and set an example. So far, there is precious little evidence of that.

Mr. Straw: I shall deal first with the right hon. Gentleman's specific points, and then with the general one. He asserts that the proposals will result in a reduction of the test in the previous Government's code of conduct.

Sir Norman Fowler: And the White Paper.

Mr. Straw: As I explained in my statement, that assertion is incorrect because the Bill will result in a strengthening of the test in the previous Government's code of conduct. Their harm test was simply one of a possibility of harm, but this is of a probability of harm. Yes, the tests differ from those proposed in the White Paper; there is no dubiety about that. I have explained the reasons. On further examination, we found that had we kept to the substantial harm test, information which, unquestionably, could have caused harm to, for example, the national interest in respect of national security or to a law enforcement investigation, but would not have fallen into the category of substantial harm, could have been disclosed. We think that that would itself have been harmful. For that reason, we have gone for more straightforward, simple harm tests.
As I said, the harm tests that we have proposed must ensure—and will be required to ensure—that the harm concerned is real, actual or of substance. We are not talking about an assertion by Ministers, or anybody else, that something could cause a trivial or minor degree of harm; it must be of substance.
The right hon. Gentleman asked whether, under clause 27, none of the submissions that go to Ministers would be disclosable, including factual statements. Factual statement background information is potentially disclosable; it depends which part of the Bill it falls under. Importantly, every Department will have to establish a code of practice for the publication of information. In my view, Departments should be separating argumentative policy advice documents from those which provide background information, and ensuring that background information is disclosable. Moreover, one of the big differences between this Bill and the code which preceded it is that the proposals will be enshrined in legislation and will secure a major change in culture.
The right hon. Gentleman asked what the Government did to become more open even before this Bill was published. Pages 1 and 2 of the consultative document set out a good deal of information about the sort of changes that have been made, where the Government have already introduced major improvements in openness.
Since I became Secretary of State, my Department has put its statisticians on a proper independent footing. No longer, as for my predecessor, is the date of publication of crime data in the gift of Ministers, who then manipulate it to suit their political purpose. We have published all operational manuals relating to the immigration and nationality directorate, except those relating to law enforcement.
When I came to office, more than a dozen reports of Her Majesty's inspectorate of prisons were sitting on the Secretary of State's desk—some more than a year old—waiting for him to approve publication. I have established a clear protocol so that those documents must be published, whether I like it or not, within six weeks. Many of my colleagues throughout Whitehall have similarly ensured that there is much more openness than there ever was under the last Administration.
We are all delighted to learn from the right hon. Gentleman that his aim is, on behalf of the Opposition, to make the legislation effective. There is always room for a Pauline conversion. As some of us remember, in the Conservative campaign guide the whole Tory party stated that there was
"no need for a Freedom of Information Act"
and that
"the only group in Britain who are seriously interested in a Freedom of Information Act are inquisitive left-wing busy bodies."
In our judgment, all British citizens are interested in a Freedom of Information Act, and we are delivering it.

Dr. David Clark: I thank my right hon. Friend for his statement, and congratulate him sincerely on his draft Bill. It marks a new stage in the struggle to sweep away the cloak of secrecy that has engulfed British society for too long, and means that for the first time our citizens will have a statutory right to information. I also thank my right hon. Friend for the manner in which he is taking the Bill forward, and for allowing wide discussions both inside and outside the House.
The Bill is in some respects slightly different from the White Paper, as I would expect, but I have no difficulty in going along with most aspects of it. I would, however, like elucidation of one issue: that of prejudice and substantial harm. My right hon. Friend said that prejudice would have to be of substance. Can we not write that into the Bill? It would be very reassuring.

Mr. Straw: I, in turn, thank my right hon. Friend for his generous comments.
My right hon. Friend is correct in saying that the Bill will, above all, change the culture in which Governments operate. This is the first time that any citizen in this country will have a right to information from Government, and Government will have to say why information should not be provided rather than citizens' having to say why it should be provided. That is a profound change from the climate that we found when we came to office.
As for my right hon. Friend's substantive point—or, rather, the point on which he differs with me—he asked whether the Bill could state that prejudice must be actual, real or of substance. I will certainly consider that, but, as my right hon. Friend knows, following the Pepper v. Hart judgment by the Appellate Committee of the House of Lords, if an issue relating to the interpretation of the Bill and of prejudice comes to court, their lordships in the Appellate Committee take account of what Ministers have said in explanation. I am sure that any court will take account of the definition that I have used—
"real, actual or of substance"—
whether or not it is possible to write it into the Bill. That is one of the reasons why I have put it on the record.

Mr. A. J. Beith: Putting the Bill on the statute book, even in its present form, would


constitute a significant advance in the right of the citizen to have information; but do we not have the impression that while it has been hidden away in the Home Office, the mice have got at it?
Will the consultation be real, and will it make it possible for some key points to be reinstated in the Bill? Does the Home Secretary recognise the feeling that—as the right hon. Member for South Shields (Dr. Clark) suggested—prejudice should be defined in some way as substantial, serious or significant, and that there should be a right of access to factual information on policy issues that might otherwise be excluded because it is in the category of advice to Ministers? Issues such as BSE and Gulf war syndrome come to mind as examples In regard to which important facts must be included in the advice to Ministers. Should not threats to the environment and the need to prevent corruption be among the grounds on which otherwise protected information can be forced into the open, in the public interest?

Mr. Straw: I first thank the right hon. Gentleman for his broad welcome for the Bill. Obviously, I understand that he may have some reservations, but it is a significant advance. I promise that, in all the very long and open consideration within Government on the Bill, I never spotted a mouse even in the Home Office, and despite the fact that there is poison against rodents in my room just around the corner from this place.

Mr. Patrick McLoughlin: Is the poison for the rebels?

Mr. Straw: It was not laid by the Patronage Secretary.
On background papers, the right hon. Gentleman asked how much we can change. It is important that, so far as possible, background papers that inform policy considerations, but do not determine them, and whose publication would not prejudice the good workings of government, should be published. That is one of the things that we need to look at very carefully. By the way, we intend to publish the background papers leading to the publication of the Freedom of Information Bill as proof of our good faith.
I say again that there are two safeguards in relation to the publication of such papers. One is that each Government Department has to publish its own programme of publication. The second is that, under clause 14, even where it is held by the Government Department and by the commissioner that the Department is entitled to refuse, as a right, to publish the information, it will still have a duty to consider exercising a discretion in the public interest for publishing that information.
We have looked at the use of the word "prejudice" a good deal. One of the reasons that it was chosen by parliamentary counsel was that it is in greater use than the word "harm". The House will be fully familiar with the fact that it crops up in paragraph (4) of part II of schedule 12A of the Local Government Act 1972. The point about that—it is, of course, an Act that was passed under a previous Administration—is that it talks about information whose publication would prejudice the authority.
The use of the word "prejudice" crops up again in the Contempt of Court Act 1981. More important, it has been the subject of much judicial definition under the European convention on human rights, so its use is appropriate. Of course, that could be the subject of more consideration.
As for threats to the environment, again, the provisions of the Bill say that environmental information has to be published, save where it would endanger the health or safety of an individual. That is a pretty high test to pass. We certainly believe that the maximum amount of information relating to the environment should be published. Again, the degree to which the Bill achieves that end will, I hope, be the subject of consideration, not least by the Select Committee on Public Administration.

Mr. Chris Mullin: I welcome my right hon. Friend's statement. I share the view that the measure will be a significant advance over what has gone before, but he will realise that there is a certain amount of disappointment among some of those who have taken a close interest in the matter. He will have seen it alleged—it is not a view I hold—that the Bill will not make a significant difference to existing practice. Will he please address that point?
Does my right hon. Friend agree that the powers and, indeed, identity of the commissioner will be crucial to the way in which the Bill is enforced? If, for example, the commissioner turned out to be a retired Cabinet Secretary, we might all have grounds for suspicion that it might not be enforced with quite the rigour that we would like, so can we have an assurance that the selection process for the commissioner will be open?
Will my right hon. Friend say something about the powers that the commissioner will have? In the event of a dispute between a Minister and the commissioner, who will have the final say?

Mr. Straw: I am grateful for my hon. Friend's commendation. The Bill is a significant advance. Of course, I have seen the allegations that it will not make much difference. They will turn out to be untrue. Once the Bill has been passed—as I hope it will be, no doubt with the support of the Opposition—into law and been implemented, there will be a profound change in what people see as their rights in relation to those of Government.
Taken with the Human Rights Act 1998 and the Data Protection Act 1998, we are changing profoundly the balance of the relationship between the citizen and the state.
We certainly did not have it in mind that a retired Cabinet Secretary might be able to be appointed to the position of commissioner. I should say—if I may give vent to a private idea—that I had it more in mind that the position might be a good place for a retired Home Secretary, or that some consideration should be given to how we may create a selection process to achieve that end. I should also say, for the benefit of the record, that that was said in jest—although I am always a candidate for a write-in vote.
The commissioner's powers will be very extensive indeed. In most of the exemptions in part II of the Bill, the commissioner will have the power to substitute his or her decision for that of the public authority. Therefore, if the public authority says, "No, don't publish", but the


commissioner says, "Yes, do publish", the commissioner's decision—subject only to an appeal to a tribunal and, ultimately, to the courts—will apply.
Policy advice, because of the certification procedure, will be dealt with at one remove. However, under the current clause 28, if the commissioner says that, in his or her view, a document that has been categorised as policy advice is one that no reasonable Minister could possibly have categorised as policy advice, the document would be published.
I accept that the position of commissioner will be a very important appointment, and that the selection procedures will have to reflect that fact.

Mr. Peter Brooke: Given our long national tradition of openness in local government, from how many advisers will the Mayor of London be able to accept confidential advice?

Mr. Straw: I am not sure of the precise answer to the right hon. Gentleman's question, although I can say that local government has been significantly ahead of national Government on the matter of openness. He may have been raising an issue about relations between central and local government. One of our proposals is that the Department that possesses information originally will have control over which freedom of information regime should apply to it.

Mr. Gerald Kaufman: Does my right hon. Friend agree that the response to his statement today by Opposition Front Benchers was absolutely mind-blowing for those of us who spent 18 years trying to get a Freedom of Information Bill passed, but watched the Tories vote down any attempts to pass such a Bill? As long ago as the 1983 Parliament, as shadow Home Secretary, I made the passage of one such Bill the official policy of the Labour party.
In considering changes to the legislation between now and the introduction of the full Bill, will my right hon. Friend take account of the fact that although parliamentary counsel are excellent advisers on words, they are not necessarily the best advisers on policy? Will he remember that fact when considering the wording of the final Bill?
Does my right hon. Friend agree that the presumption in the legislation must be that information will be disclosed, rather than withheld; that risks shall be taken on disclosure, rather than on concealment; and that any changes between the draft Bill and the full Bill shall be made to widen the window of information, and to get rid entirely of the net curtain mentality that prevailed under the Tory Government?

Mr. Straw: I do indeed remember my right hon. Friend's pioneering contribution to freedom of information legislation and his action in 1983, when he was shadow Home Secretary, to make that the then Opposition's official policy. I share his view on the Conservative Opposition's rather rapid conversion on the issue. Although they do not have a monopoly when it comes to conversions, their conversion on this occasion is bigger than others that I could think of.
I accept what my right hon. Friend says about parliamentary counsel, who, in my long experience, are brilliant, but they do not presume to make policy decisions, which are a matter for Ministers.
I fully understand that my right hon. Friend has not had time to see the consultative document, but clause 8 lays down the fundamental right that every citizen will have. It starts:
"Any person is entitled, on making to a public authority a request for information—

(a) to be informed by the public authority whether it holds information of the description specified in the request, and
(b) if that is the case, to have that information communicated to him."

That clause is fundamental to the Bill. It sets up the presumption of a right to information. Everything else is merely an exception and does not detract from the fundamental nature of that right.

Mr. Richard Shepherd (Aldridge-Brownhills): That statement would have been truer of the White Paper than it is of what we have seen of the draft Bill. I welcome the fact that this is a draft Bill that can be considered by the House at greater leisure and in detail. However, it represents a significant retreat from the White Paper. In some respects, although it is broader, it is weaker than the code of practice. It removes the code's more enforceable—in the sense of discretion—public interest test, making it easier to conceal misconduct. It exempts all information about the formulation and development of Government policy, including factual information and scientific analysis on issues such as bovine spongiform encephalopathy and genetically modified food in clause 28(1)(a). It replaces the White Paper's substantial harm test with a lower prejudice test. It contains wide catch-all exemptions, allowing authorities to refuse disclosure without having to show that it would cause harm. It allows new exemptions to be created at short notice to block requests already received.
Those are just a few of the points that show that the draft Bill is a significant and substantial retreat from the Prime Minister's assurance in the White Paper about the partnership between the citizen and the state. It reverses the White Paper's presumption that the information is the citizen's and gives central Government large discretion over the release of information.

Mr. Straw: The hon. Gentleman has taken an active interest in the subject, not least as a member of the Select Committee on Public Administration, so I am sorry to say that I do not agree with him. I do not believe that anyone reading the Bill would come to his conclusions. There has been no dubiety; I have not disguised from the House for a second that we have differed from the White Paper's six areas in which the substantial harm test was to be established. This has been a consultative process in which we have had second and third thoughts. We have changed the effect, though not the method, of the clauses relating to policy advice, principally clause 28. However, in no sense could that be described as a significant retreat from the White Paper.
With respect, the hon. Gentleman is wrong to say that we are reversing the presumption. I ask him to look at clause 8, which establishes for the first time the clear right of every citizen to seek information from Departments and other public authorities. The authority must argue the case for an exemption.
[Mr. Straw]
We are publishing a large amount of information about BSE—a process that may have begun under the previous Government. [Interruption.] It may be discretionary. The House may have to consider that matter, not least in the Public Administration Committee. I have no interest in factual information being the subject of exclusion or exemption. However, there is an important point about policy advice. I have read and re-read the Select Committee's report carefully. It never argued that the process of policy development and formulation should take place in an environment in which people were not able to have disagreements in private. Policy formulation in government, in opposition or in the editorial conferences of newspapers cannot take place properly unless people have confidence that what they say in a meeting will not be broadcast publicly. Institutions cannot operate if they are not allowed some privacy in policy formulation.
Some countries with freedom of information regimes have not given proper protection to policy formulation and advice. The paradox of their situation is that, far from that leading to an increase in the accountability of Ministers and decision makers, it has reduced accountability because it has cut the audit trail. Officials and Ministers have gone in for Post-it notes and oral decisions which should have been properly recorded, or for devices for ordaining all sorts of documents which have nothing to do with the Cabinet or Cabinet Committees as Cabinet documents. We want a straightforward and honest regime which recognises that we are dealing with three competing rights—the right to know, the right to privacy and the right to confidentiality. Getting the balance right is difficult, but I think we have achieved it.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich): Is my right hon. Friend aware that the best test of the legislation will be the first occasion when the Government give factual information to the House of Commons that is rather uncomfortable for them—something that may arrive sooner than they expect? Is it the intention to include detailed papers about information on European matters which will be of grave concern? He will be aware that the House of Commons needs to take back to itself the right of access to information, and that it is because of the 20 years of refusal to give such facts and figures to the House that the Bill is desperately needed.
May I comfort my right hon. Friend with one thought? He should not worry too much about those argumentative papers which he says are essential—those will be the ones that get into the public domain without any assistance from him or anyone else.

Mr. Straw: I can reassure my hon. Friend that my ministerial colleagues and I publish factual information that is uncomfortable to us every day of the week. It is right that we should do so, because the public have a right to know what is going on in our area of the woods. The statistical services of the Home Office have been put on a properly independent basis, and it is now the director of the research, development and statistics directorate, and not Ministers, who publishes those statistical data—whether they are uncomfortable or not—and sets the date for publication.
On European Union matters, I agree that much more should be subject to parliamentary scrutiny. In terms of justice and home affairs, we have sought, with the co-operation of the relevant Select Committees of this House and the other place, to improve the flow of information that is made available to the House in advance, for example, of Justice and Home Affairs Councils. We are always open to suggestion on ways of improving the flow of information.

Mr. Gerald Howarth(Aldershot): Many people will think that the Home Secretary has made a good case against his own Bill. Given the huge raft of exemptions for which he has provided, can he give some practical examples of information that he expects the Bill to produce which the Government are not prepared to produce at the moment? Does he agree that, under the new proposals, he would have been prevented from seeking an injunction against The Sunday Telegraph when it tried, rightly, to place in the public domain information to which the public should have been entitled?

Mr. Straw: I find the hon. Gentleman's point about the injunction, and that of his right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler), to be eccentric. With the full support of the courts, I was seeking to protect the privilege of this House to see the document first, as well as the commission and the Lawrence family. No one could argue that I was seeking to suppress publication, as there was no doubt that the document would be published three days later, in any event.
The hon. Gentleman asked what would happen under the Bill that is not happening now. I gave a series of practical examples in my statement, and I am sorry that he was not paying his usual attention to what I said. The examples included information on waiting lists and the allocation of resources by health authorities; information on school admissions policies; important information on the police service, which should be made available unless it interferes with the investigation or prevention of crime; and information on many aspects of central Government.
I am delighted that the hon. Gentleman recognises that we have been very open. Often, when I am asked a parliamentary question, it is suggested that I do not give information, but I say that we ought to provide it. I and my ministerial colleagues have sought to ensure that we provide much more information than the previous Government did or than we are required to provide.

Mr. Rhodri Morgan (Cardiff, West): I, too, congratulate my right hon. Friend the Home Secretary on finally presenting the draft Bill to the House, after what seemed like an elephantine gestation period. I thank him for his kind words about the Select Committee on Public Administration, which it has been my privilege to chair, and its work on the draft Bill.
Are not the disappearance of the substantial harm test, the new override powers of the tribunal over the Committee's decisions and the almost unilateral nature of the public interest test, which is now in Ministers' hands, bound to lead to the suspicion that all the Sir Humphreys have drawn the covered wagons of Whitehall into a circle, to deny us information that, had we followed the White Paper principles, would have been put in the public domain if someone had requested it?

Mr. Straw: I thank my hon. Friend for what he said about the publication of the draft Bill. Our manifesto


commitment was to legislate in this Parliament, and we are only two years into it. We produced a White Paper in late 1997 that was considered by the Select Committee that he chaired, and we have now produced a draft Bill. We will legislate as soon as we can and I believe that we will end up well before the end of this Parliament with an Act on the statute book. That, I think, is significant progress.
I have sought to explain to the House why we decided, on careful examination, that it was not possible to use a single substantial harm test to cover all the disparate interests. Nor, in my judgment, was that desirable, because there could have been information whose publication would have caused real harm, but harm that could not quite be categorised as substantial, that would have had to be made available.
My hon. Friend spoke about the Sir Humphreys, but Ministers are responsible for what is in the draft Bill. We have taken advice, which has not been all one way, but we take full responsibility as Ministers. We are not hiding behind officials' skirts. Ministers have brought the proposals to Parliament, and it is for Parliament to decide how to dispose of them.

Mr. Eric Forth (Bromley and Chislehurst): Does the Home Secretary accept that in the brave new world that he is outlining, the taxpayer should and will learn a lot more about people whose pay and expenses are met through taxation? Should people who work in a Department on substantial salaries and who travel extensively be prepared to be open with the public about their activities? Will he give an undertaking that, before

the legislation is enacted, he and his colleagues will tell us everything about what their political special advisers do in Departments, spending taxpayers' money?

Mr. Straw: I have answered many questions about the activities of my political advisers. It is usually pretty straightforward information. I am not sure whether it was the right hon. Gentleman or someone else who tabled a parliamentary question about the travel costs of my special advisers over the past two years, but I have answered the question and I shall continue to answer such questions.

Mr. Ronnie Campbell (Blyth Valley): I welcome the draft Bill. I remember that, many years ago, in the Public Administration Committee, when the Tories, to a man, wanted a code of practice on freedom of information, Labour Members, to a man, wanted a statutory right. The statutory right is the biggest improvement that the Government have made. The Committee will sit shortly, take evidence and make recommendations. Can I take it that those recommendations will be accepted?

Mr. Straw: The serious answer is that the usual dialectical process will take place—[Interruption.] Conservative Members do not know what that is. Thesis, antithesis and synthesis will take place. The Select Committee will make its proposals and we will read them carefully. I have not been able to accept every proposal made by the Select Committee in its previous report, but we have accepted several, including the criticisms that there was a disconnection between the data protection regime and the proposed regime for the Information Commissioner. We have sought to ensure that they will be properly connected.

Madam Speaker: Order. On that note, we will move on.

Points of Order

Mr. Eric Forth: On a point of order, Madam Speaker. You were here earlier when we heard an almost unbelievable statement by a Minister. He told the House that a Secretary of State would make a statement about an important matter of public policy and a large sum of public money. You must have shared my astonishment when it was revealed that that statement would be made not here in the House, but in some other, as yet unspecified, location. Can you do anything to persuade or charm Ministers into coming to the House to make statements of huge public interest? That issue surely cannot be allowed to slide by without action being taken, preferably by yourself, but otherwise by anyone who can do so.

Mr. Quentin Davies: Further to that point of order, Madam Speaker.

Madam Speaker: Order. I think that I can competently deal with the matter. I was dismayed to hear the Secretary of State for Social Security tell the House that a statement would be made later today outside the House, presumably by the Department of Trade and Industry. I have no knowledge of what that statement contains, whether it is new policy, an extension of policy or a change of policy. If it is a new policy or a change of policy, it should be made at least by written answer in this House. The House deserves greater respect in such matters. I hope that those on the Treasury Bench will let the Secretary of State for Trade and Industry know my views on the matter. I might add, for some of those in the media who do not know the term "Treasury Bench", it means the Government Front Bench.

Mr. Andrew Mackinlay: On a point of order, Madam Speaker. When a complicated and important statement is being delivered, would it be within the rubric of the House for copies of the Minister's statement to be made available to Members in the Chamber? I have thought about that point for a long time. My right hon. Friend the Home Secretary took us through the complicated harm test rule, which I genuinely wanted to understand and would have asked about, had I caught your eye. I confess that I am still somewhat confused by, but very interested in, the issue. I notice that members of Press Gallery have the luxury, at the moment the Minister rises, of having the statement distributed to them, and some Front Benchers and other hon. Members close to those Front Benchers have access to statements. Would it be possible to explore whether statements could be made available to other hon. Members? If I were to rush out to get a copy—and this is the rub—I might offend you by being absent from the Chamber.

Madam Speaker: I understand the hon. Gentleman's feelings and I appreciate that they are echoed in many parts of the House. It is not a matter for me: it has always been for the Minister making a statement to determine when the documents will be made available. If the hon.

Gentleman wishes to take the point up with the Modernisation Committee or the Procedure Committee, he is at liberty to do so.

Mr. Patrick McLoughlin: Further to that point of order, Madam Speaker.

Madam Speaker: Order. I have dealt with that point. All Ministers in all Governments determine when they issue statements. It is for the Modernisation Committee or the Procedure Committee to consider the matter.

Mr. James Gray: On a point of order, Madam Speaker. I was surprised to read in this morning's edition of the Chippenham News that the Chancellor of the Exchequer is today visiting the Dyson factory in Malmesbury in my constituency, as I have received no notification of any kind from his private office. Am I right in thinking that that is because I am an Opposition Back Bencher, and that it might have been different were I a Government Back Bencher? At all events, will you confirm that Ministers should always notify Back Benchers when they visit their constituencies?

Madam Speaker: It is custom and practice—and courtesy—for an hon. Member to inform another hon. Member when visiting that hon. Member's constituency. However, I have always made it quite clear that this is really a matter that should be resolved between the hon. Members concerned, and that it should not be dealt with by means of points of order.

Mr. Nicholas Soames: On a point of order, Madam Speaker. You will have seen the news over the weekend that there is to be a very substantial increase in NATO force numbers on the Kosovo border. Given that the NATO force declaration meetings are taking place this week, it is possible that the decision will be made while the House is not sitting. The clear implication is that there may be a fundamental change in approach to NATO's Kosovo strategy. Will you inquire whether it might be possible for the Foreign Secretary or the Secretary of State for Defence to come to the House before the recess to explain exactly what the Government and NATO have in mind?

Madam Speaker: The Government Front Bench will have heard the hon. Gentleman's request. It is not entirely a matter for me. The hon. Gentleman must also, of course, use the usual channels in pressing his point for a statement before the House rises for the recess.

Mr. Patrick McLoughlin: On a point of order, Madam Speaker. Bearing in mind what you said to the hon. Member for Thurrock (Mr. Mackinlay) about the substance of his point of order being a matter for the Modernisation Committee, is the fact that the Vote Office often receives the texts of statements before they are made in the Chamber a matter for you?
As the hon. Member for Thurrock said, if an hon. Member leaves the Chamber to get a statement from the Vote Office once that statement has started to be read, you have said that will not call that hon. Member, because he or she will not have been present for the whole statement. However, as that statement is often available at


that time in the Vote Office, hon. Members who are not interested in it are able to see it, while those who are interested are forbidden, by your ruling, from seeing a copy.

Madam Speaker: I would not call an hon. Member who had left the Chamber to get a consultation document or any other document and had therefore missed part of the statement, as that represents a great discourtesy to the Minister answering questions at the Dispatch Box. However, that is not a matter for me, nor for the Vote Office. If hon. Members want to pursue the matter, they should do so in the proper way. The House has two relevant Committees—Modernisation and Procedure. Such matters should be given to those Committees for examination, so as to allow discussions with Ministers on whether they want the texts of their statements to be made available to other hon. Members.

Orders of the Day — Commonwealth Development Corporation Bill [Lords]

[Relevant documents: The Second Report from the International Development Committee, Session 1998–99, on The Provisions of the Commonwealth Development Corporation Bill [Lords] (HC 212), the Eighth Report from the International Development Committee, Session 1997–98, on The Future of the Commonwealth Development Corporation (HC 936) and the Government's Response thereto (HC 1100 of Session 1997–98.]

Order for Second Reading read.

The Secretary of State for International Development (Clare Short): I beg to move, That the Bill be now read a Second time.
I am very pleased to recommend to the House today a Bill that will transform the Commonwealth Development Corporation from a small-scale, Government-owned investment organisation into a public-private partnership that will operate on a larger scale and channel private sector investment into the poorest countries. We hope also that the new CDC will encourage by example much larger flows of foreign investment into the least-developed and poorest economies, by proving that such investment can be safe and profitable.
As the House knows, the Government have given a greatly increased commitment to the promotion of development, and to the reduction of poverty in the poorest countries. We have established a separate Government Department that now has Cabinet status. We have increased that Department's capacity so that it now has expertise on a wider range of policy issues such as trade, debt, international investment, agriculture reform and environmental agreements. The Government can therefore take full account of the needs of developing countries, before deciding on our position in international negotiations on all those issues. We have also reversed the long years of constant decline in the volume of aid spending as a proportion of gross domestic product, by increasing my Department's budget by 28 per cent. over the next three years. That is the largest increase to be made in any Department's budget.
Also, we have re-examined and refocused the Department's work, and in November 1997 we set out our new policy in the White Paper entitled "Eliminating World Poverty: A Challenge for the 21st Century". That White Paper refocuses all the work of the Department on the eradication of poverty and on mobilising the international system to meet the agreed targets of halving by 2015 the proportion of people in the world living in poverty. Other targets include getting all the world's children into basic education, and providing basic health care to all, by the same date.

Mr. Bowen Wells: Does the Secretary of State share my concern that, although her White Paper is so radical, the House has had no opportunity to debate it, despite promises from the business managers? A thorough debate on the White Paper and its implementation is long overdue.

Clare Short: I certainly agree that the White Paper is worthy of debate. We have had interesting discussions on


it in the Select Committee on International Development, which the hon. Gentleman chairs so ably. The problem is that the Government are committed to large amounts of new legislation, and it is difficult to get all our business through the House. I take the hon. Gentleman's point, and would welcome any opportunity to hold a debate.
As part of our policy commitment to the systematic reduction of poverty in the poorest countries we have made it clear that development and poverty reduction cannot be achieved through improvements to social policy alone. That is an important point, but it has not been fully accepted in previous debates. Economic growth must outstrip population growth, or poverty will grow. That is what happened to much of sub-Saharan Africa during the 1980s.
We seek to promote Government investment in education for all and in basic health care for all. However, we also seek efficient economic management and the encouragement of a thriving—and responsible—private sector and of inward investment. It is clear that the big increase in economic growth that is needed in the poorest countries will not be achieved unless there is a big increase in inward investment. Our work to encourage development must focus on creating conditions that will encourage increased inward investment in the poorest countries.
For that reason, we propose the transformation of the Commonwealth Development Corporation from a wholly Government-owned institution into a public-private partnership.

Mr. Desmond Swayne: What is the difference between a public-private partnership and a privatisation, or partial privatisation?

Clare Short: I am about to outline the difference in great detail—although I should have thought that the hon. Gentleman would understand the meanings of words. Privatisation takes something that is owned by the Government and allows commercial rules and market forces to determine its future. A public-private partnership means that the Government retain a stake and that some public sector objectives are entrenched in the relationship with the private sector. That is what we seek to secure—[Interruption.] There is no need for the hon. Member for Chesham and Amersham (Mrs. Gillan) to giggle about it; she might find it difficult to understand these matters, but if she listens carefully, she will understand a little more.

Mr. Edward Leigh: Will the Secretary of State give way?

Clare Short: If the hon. Gentleman wants to speak on the same point, it might help his thought processes a little if I explain it so that he may better understand it.
The Commonwealth Development Corporation was established in 1948 as the Colonial Development Corporation, to develop the resources of the then colonies. It was wholly Government-owned and was funded by loans from Government. Its remit was extended in the 1960s to the independent Commonwealth countries, and, in 1963, it changed its name to the Commonwealth Development Corporation. Since then the corporation has

developed a long record of successfully identifying and managing investments in difficult conditions. It has investments in more than 400 enterprises in 55 developing countries.
The corporation has made a substantial contribution to development, and I pay tribute to all the staff who have worked for it so successfully. However, on coming to office, the question that I asked about the CDC—as well as all the other activities of my Department—was whether it could make a bigger contribution.
It was clear that, for as long as the corporation remained in the public sector, it would be constrained by public sector financial controls. Even with our growing development assistance programme, the CDC would obviously face severe limits on available funds. I was therefore very interested in examining whether it was possible to reorganise the CDC so that it could enlarge its investments by tapping into private sector funds.
My second and bigger objective was to examine whether the CDC could be used to leverage larger private sector investment into the poorest countries. If the CDC was bigger and could make investments that achieved a rate of return attractive to the private sector, it could demonstrate that the private sector could invest successfully in countries that it currently shuns. That is a second and important part of my objective in recommending the reorganisation of the CDC.
We therefore propose to create a new CDC that is a true public-private partnership and which provides for direct private sector involvement and also for the on-going involvement of the Government as a partner. We see that as a long-term partnership and we intend to retain a substantial minority holding in the CDC for the foreseeable future. That means that the Government will have a long-term stake in CDC's success.
As well as our ordinary shareholding, the Government will hold a golden share, which will exist as long as we have a substantial interest in the CDC. That will protect the CDC's investment and ethical policies and, therefore, its development role.

Mr. Nicholas Soames: I warmly welcome the step that the right hon. Lady is taking, and pay tribute to the work of the Commonwealth Development Corporation. Does she agree, however, that, while the Government will retain a golden share, it will be important for the CDC to secure from where it wishes the funds that it needs for its future development? Does she agree that it should be able to go to capital markets outside as well as in this country?

Clare Short: The CDC is free at the moment to raise funds offshore because it is not constrained by the rules on a publicly owned investment organisation. One of the major reasons for the CDC's ceasing to be wholly Government owned is to enable it to raise funds within Britain to enlarge its investment portfolio.

Several hon. Members: rose—

Clare Short: Perhaps I may finish this paragraph and then I will give way to all the hon. Gentlemen—I think that they are Gentlemen—who are attempting to intervene. Of course, I am not questioning their gentlemanliness.
Let us be clear that a continuing Government role is necessary to protect the CDC's development role. The hon. Member for Chesham and Amersham might like to concentrate on that point. Pure privatisation would simply drive the CDC out of the least-developed countries. A privatised CDC would simply behave like other commercial investment companies. A wholly publicly owned CDC is limited in the way in which I described. The public-private partnership is thus essential to our objective of increasing private sector investment and ensuring that that goes to the poorest countries.

Mr. Gary Streeter: The Secretary of State has described the primary difference between a public-private partnership and a partial privatisation, which is that the Government intend to retain their minority holding for the foreseeable future. Obviously, that presupposes that the Government may get rid of that holding at some stage. If they do, will the CDC still be a public-private partnership?

Clare Short: It is not merely a case of the monetary holding but also of the golden share to which I alluded. If the hon. Gentleman has read the debate in another place as I am sure he has, he will understand that. If the Government got rid of their golden share and all the principles that are entrenched—where the CDC will invest and the ethical principles of investment—the CDC would be privatised. I have worked hard to ensure that that cannot be done without returning to the House. There was a technical difficulty, but we have secured that now and that is right.

Mr. Leigh: May I return to the question that my hon. Friend the Member for New Forest, West (Mr. Swayne) asked? I am not clear how the present proposal differs from privatisation. After all, in previous privatisations the Government retained a golden share. The essence of a privatisation is that the Government sell the majority of their shares. How is this proposal different from an effective privatisation?

Clare Short: Oh dear me! I think the hon. Gentleman was a Minister in the previous Government and yet he was obviously not clear about what they were up to. There were transitional golden shares to assist privatisation, but they were all phased out. This is an indefinite golden share and that is the difference. I hope that I have helped.

Mr. David Heath: Perhaps we can move away from the definition of privatisation. One of the knottiest problems with which the Secretary of State's Department has been wrestling is the future tax status of the corporation. Will she explain what that will be during her remarks today, or will we have to wait for the Standing Committee, in which case it will make it more difficult to have a reasoned debate on the subject?

Clare Short: I shall explain how we will do that today. The principle is agreed and clear but the full details and the amendment will be introduced in Committee.
The emphasis of the partnership will be on the CDC continuing to do what it does best: investing in the poorest countries that other investors shun. Its purpose will be to maximise the creation and long-term growth of viable businesses in developing countries—especially the poorer

countries—to achieve attractive returns for shareholders, and to implement social, environmental and ethical best practice. The challenge is to ensure that the CDC continues to focus on the poorer countries. It may help Opposition Members in understanding the difference between privatisation and partnership to know that that focus will be secured through the investment policy required under the articles of association, a copy of which has been placed in the Library. Hon. Members who made points of order might like to know that.
The policy sets out a list of developing countries for whose benefit the CDC may invest, and requires that at least 70 per cent. of its investment over a rolling five-year period is for the benefit of the poorer of those countries. It also states that the CDC will aim to ensure that 50 per cent. of its investment each year will be for the benefit of sub-Saharan Africa or south Asia and notes several sectors, such as manufacture of equipment for military purposes, in which it may not invest.

Mr. Andrew Robathan: The Secretary of State knows that the Select Committee considered that difficult issue. If the policy changes slightly, or military investments are made, what sanctions will be imposed—short of sacking the whole staff by using the golden share? How exactly will the ethical policy be enforced?

Clare Short: It will be entrenched through the articles and through a series of procedures such as the ethical committee, on which appointees of the Secretary of State will have a majority. The policy will not be amendable without the consent of that committee. The ultimate sanction is the golden share. None of that will be changeable without a majority on the committee and the permission of the golden shareholder. The policy should not be immutable because there may be improvements in the ethical policy, or the poorest countries may develop so that we need to change the list, but it is entrenched so that change to it cannot be forced by market forces. Investors will know that it is a permanent, unchangeable part of the organisation's structure.

Mr. Andrew Tyrie: What will happen if the CDC makes losses? Will a proportion score against the public sector financial deficit? Rather than the approach taken so far to get money to the least—developed countries, have the Government considered the development of a loan insurance scheme?

Clare Short: The CDC will be a private limited company with minority Government ownership under the same rules as any other plc. There are already all sorts of loan insurance systems. The Export Credits Guarantee Department is, in a way, such a system, and there is also the World Bank MIGA—Multilateral Investment Guarantee Agency—loan insurance system. The short answer is no.

Mr. Tyrie: Those are subsidised insurance schemes.

Clare Short: Indeed, but as the hon. Gentleman knows, one reason why the private sector will not invest in such countries is political instability and weak enforcement of bank regulation and contracts. My Department, the World Bank and others now work with much better understanding, especially after the east Asian crisis, of the


conditions for beneficial inward investment, but there is always a reputation time-lag. If the CDC can be a cutting edge player that comes in earlier to demonstrate track record and rate of return, it will increase the private sector flow into countries that are shunned. That is the whole idea. The investment policy that I have described will be put in place before private participation is invited and the partnership is established; any subsequent changes to it will require the agreement of a majority of ordinary shareholders and the golden shareholder. The investment policy will entrench the CDC's focus on developing countries.
As I have said, we expect the CDC to operate as an exemplary social, environmental and ethical business. That approach is reflected in its business principles and policies, which cover social, environmental, health and safety matters and business ethics, as well as a statement of the general principles by which the CDC will conduct its business. Copies of those principles and policies are available in the Library. The CDC is to be congratulated on those documents, which reflect a great deal of careful thought. They have been developed over the past 15 months through a full consultation process, involving staff throughout the organisation. The precise mechanisms for dealing with any changes to those policies will differ from those for the investment policy, reflecting the fact that they will continue to evolve in line with best practice—as I pointed out earlier—but they will also be entrenched in the company's constitution and protected under golden shareholder reserved rights.
I am confident that those mechanisms will be effective in securing the CDC's development role. We consider that it is absolutely essential that those policies, and the mechanisms to protect them, are clearly set out from the start in the partnership framework and in the company's constitution. They will then be an essential part of the company's identity and will be clear to all future investors.
As hon. Members would expect, before my right hon. Friend the Prime Minister announced the proposed partnership at the Commonwealth Heads of Government conference in October 1997, we had commissioned expert external advice on the viability of the proposal. The advice made it clear that, provided that the partnership was well designed, there was likely to be strong private sector interest in investing in the new CDC. Clearly, that is our aim and I therefore took pains to ensure that the design of the new CDC would make it attractive to private sector investors.
A CDC that will attract private investment requires a framework such as the one that I described, so that there is no fear of unpredictable Government interference. The public sector interest is strong and clear; it will be entrenched from the start and will not depend on the exercise of unpredictable intervention—for example, intervention from one Minister after another changing their mind, or as a result of a change of Government. The principles will be entrenched, so that anyone considering investing in the corporation will be able to see what future performance is likely to be. That also means setting an appropriate capital structure for the CDC and ensuring that the CDC is tax efficient, so that it can compete with other comparable institutions, as has been pointed out.
There has been some media interest in the CDC's tax treatment. It was most important to ensure that the tax treatment was right, and that took a little time. However, I am now confident that it is right. It is obvious that the CDC has to be able to compete with offshore funds, if it is to achieve its goal of investing in developing countries using capital raised in a competitive private investment market dominated by offshore funds. From the start, it was clear to me at least that it would be unacceptable for a major instrument of the UK's development policy to be based offshore. I realise that, some time ago, the hon. Member for South–West Devon (Mr. Streeter) said to the Financial Times that it should be offshore.

Mr. Streeter: I said "could be".

Clare Short: No, the hon. Gentleman said "should". In effect, he said, "Stop dithering—put it offshore."
It seems to me that a body with a major golden share in a Government holding, which is an instrument of our development policy, should be based in Britain. I asked my advisers where it could be based offshore because I thought that it might be bearable to place it in Africa, but they replied, "The Cayman Islands—or Ireland." It would be nice if it were in Ireland, but this is a British—a United Kingdom—development institution.

Mr. Streeter: Jersey.

Clare Short: They did not suggest Jersey, and I do not think that Jersey would do the trick for the purpose of competing with other offshore funds. That was the origin of the tax problem: other funds go offshore and benefit from very low tax, but an instrument of British development should be based in Britain or, I should say, in the United Kingdom. That was the circle that we had to square.
With the Treasury and the Inland Revenue, we considered all possible options, and I can today announce our conclusion that we should provide tailored tax treatment for the CDC public-private partnership. We discussed whether there should be a class of development institutions, which would have been another way of approaching the problem, but we settled on a tailored tax treatment that will enable the CDC to compete for funds with companies that are based offshore. That treatment will endure so long as the Government hold their golden share in the CDC. The main element will be exemption for the CDC from corporation tax arising on income and chargeable gains from its investment activities. Instructions have been sent to parliamentary counsel and I intend to table the necessary amendments in Committee. The solution is a good one which will enable the CDC to compete fairly and be a major instrument of British development policy.
The International Development Committee has also expressed interest in the CDC's capital structure, and it is right to say that restructuring is needed. Currently, the CDC's balance sheet consists of about £750 million of interest-free debt to Government and reserves of some £515 million; obviously, as a public corporation, it does not have any share capital. We intend to restructure the CDC's capital to create a balance sheet which potential investors will recognise as commercially viable and which will be a strong balance sheet, suited to the CDC's


business needs. We do not propose to leave interest-free loans on the balance sheet once the partnership is established; that would, in effect, be a subsidy to shareholders, which is clearly wrong. We shall restructure the loans into equity, or commercial loans, or a mixture of the two. We shall keep the International Development Committee fully informed as those decisions are made, and lay any proposals before the House.
As the House will know, there is always a potential state aids angle in any Government sale. After informal soundings with the European Commission, we do not consider that tax or balance sheet proposals will either distort intra-Community trade, or be likely to create any difficulty. However, to provide investors with certainty, we plan to notify the Commission at the same time as we inform it of the capital restructuring—a process required to ensure that there is no hidden subsidy in capital restructuring. We expect speedy clearance from the Commission on both questions.
As I have made clear, we want to encourage wide participation in the CDC, and that will ultimately lead to our seeking a listing. The CDC's business principles will ensure that it is very much an ethical investment, so it is likely to appeal to the growing sector of ethical investors. However, we do not intend to target ethical investors alone: interest could also be expected from, for example, those who are already targeting emerging markets and who are interested in moving into poorer frontier markets.
The timing of a listing will depend on several factors, including market perceptions of pre-emerging markets and of the CDC's track record and forecast performance. The key will be to ensure that new capital is introduced at the right time for the success of the CDC's business. However, we recognise that listing might not be possible at the time when other conditions are right for creation of the partnership; in that case, we would look at alternatives for a transitional period. For example, the CDC might have a good track record, but if there is turbulence in emerging markets, the time might not be right for a listing. We must move at the right times and to the right stages during the process of transformation.
The CDC's financial track record is obviously a key issue. Clearly, 1998 was a very difficult year for emerging markets. The International Finance Corporation, which is part of the World Bank group, produces an index that measures, for example, what is happening in emerging markets; it fell by 22 per cent. in 1998. Against that background, the CDC's performance was creditable: although for the first time in many years it made a loss in 1998, that was largely due to provisions against investments in Indonesia and Pakistan; although the underlying investments were good, the provisions were necessary because foreign exchange problems meant it was not possible to get money out of those countries.
Overall revenue in 1998 was £147.2 million with an operating surplus of £110.4 million. Although both figures are lower than in 1997, they have held up well in difficult market conditions. In previous years, the CDC has generally achieved profitability targets, with returns comparable to or above those of other development finance institutions. However, it is obvious that returns at historical CDC levels will not be enough to attract private investors.

Mrs. Cheryl Gillan: The Secretary of State obviously examines the CDC's figures.

Does she envisage that the CDC will make a loss in the next financial year or return to its position of the year before last?

Clare Short: I have not made such a projection, and I do not think it would be useful for me to do so. The CDC runs its own business. Although I exercise some supervisory powers, I do not consider myself to be an expert when it comes to the economic performance of emerging markets. I read about such matters with a great deal of interest, but I do not think my predictions would be very valuable in guiding the CDC in its investment operations.
We are confident that the CDC will be able to increase its profitability and make the returns needed to attract private investors. Much of the improvement will come from the CDC's capturing for itself more of the profitability of the investments it makes. Historically, the CDC has largely invested in secured debt, which is obviously relatively low risk and therefore offers low returns. In preparation for the partnership and to increase its capacity to attract private sector funds, the CDC has started the process of shifting to risk capital—meaning equity and quasi-equity. It will, therefore, capture a higher return on its investments.
In 1998, more than 60 per cent. of new investments were risk capital, compared with around 30 per cent. in 1997. That is important not just in order to attract private sector funds but from a development point of view. Equity investment leads to a stronger commitment to the development of a business with long-term growth prospects. Risk capital is in short supply in the poorer countries. A larger CDC creating more equity investment will bring much greater benefits to developing countries.

Mr. Andrew Rowe: Some of us are concerned that the easiest way for the CDC to make serious savings on its overheads in difficult market conditions is by closing some of its offices in countries where its investment is coming to an end. Yet, when the CDC gave evidence before the Committee, it pointed out that one of its best selling points was its unrivalled network of offices in countries in which few of its competitors were active. Has the Secretary of State discussed with the CDC the fact that, in order to make itself more attractive to the capital market, it is in danger of eliminating the very asset that makes it an attractive development instrument?

Clare Short: The hon. Gentleman is absolutely right. That is what would have happened if we had simply privatised the CDC and it had cut costs by closing offices in difficult markets and moving to easier markets. That is why we must have a partnership and why we have had to entrench the rulings about the countries in which the CDC invests. We have said that at least 50 per cent. of the CDC's investment in developing countries must go to the poorer countries, which will prevent the search for greater returns leading to the kind of action that the hon. Gentleman described. This measure is designed deliberately and carefully to prevent that outcome.
The hon. Gentleman will be aware that the low-risk loan investments that the CDC has taken in the past have the first call on return and offer low rates of return. An equity stake in a business offers an interest in its long-term creativity. By opting for equity, one potentially


increases the rate of return and commits to creating in developing countries businesses with a capacity to generate more long-term economic growth. The move to equity is necessary to attract private sector investment, but it will also bring benefits by helping to create businesses in developing countries.

Mr. Streeter: Has not the Secretary of State forgotten the other part of the equation? The reason why equity investments are often referred to as risk capital is, of course, that they have no security, and if the company in which one is investing fails, one might lose the total value of the investment. At least with secured loans, more often than not, one gets back some of the asset and is able to recover some of the investment. Will the right hon. Lady take that into account? The shift from secured loans to equity alone will not, perhaps, give her the uplifting returns that she seeks.

Clare Short: The hon. Gentleman does not seem to understand the whole purpose of the exercise, which is to get more private sector investment into countries into which it currently does not flow. That will be done directly through the CDC and by proving, through the CDC, that such private sector investment can be profitable and secure. The rates of return that the CDC, as a lender of last resort in very secure loans, at present achieves will not attract the private sector. The CDC must be able to handle equity investment if it is to succeed in bringing private sector investment into developing countries, which will not thrive economically unless we can bring them more such investment. It might help the hon. Gentleman if he reads my explanation in Hansard later.

Mrs. Maria Fyfe: I have very little knowledge or experience of the stock market, but a question has occurred to me while I have been listening to my right hon. Friend. If the CDC should go into substantial profit, would there be an opportunity both for private sector investors to have a reasonable return on their capital and for there to be greater investment in developing countries?

Clare Short: My hon. Friend describes the position exactly. At the moment, the private sector tends not to invest at all in sub-Saharan Africa. She will know that during recent globalisation, the international flow of private sector investment has massively increased, but 90 per cent. of that goes to the 11 most-developed countries and very little goes to the rest. The Bill's purpose and the objective of successful development is to create conditions in which the private sector will want to invest in the poorest countries. If equity investment brings a commitment to more creative companies in those countries and a higher rate of return, investment in those countries will be attractive to the private sector, which is the overwhelming objective of this exercise.
In the past, the CDC has also tended to be a lender of last resort because it is a public sector institution, so it is required not to compete for investments that are attractive to the private sector, as the hon. Member for South-West Devon will know. It is, in effect, required to seek a rate of return that is lower than the commercial rate; otherwise, the public sector would be unfairly crowding out the

private sector. The new CDC will no longer be constrained by being wholly publicly owned, so it will be able to seek good investments that offer attractive financial returns and make a greater contribution to sustainable development.
The Bill is the first stage in the creation of the public-private partnership that I have described. The Bill is largely technical, and the policy issues that I have outlined—other than the entrenchment of the Government's shareholding—do not generally appear in the Bill. As I have said, those issues are covered in the background papers that have been deposited in the Library, and they are essential to understanding the Bill's purpose and effects.
The Bill, taken narrowly, covers four main areas. The first is the provisions needed to transform the CDC into a public limited company. Initially, the Government will hold all the shares. The intention is to proceed with that transformation as soon as practical after the Bill becomes law. As I have explained, the timing of the eventual sale of the majority holding will depend on a number of factors and in particular on market conditions.
Although the transformation of the CDC is a technical issue, I should explain a little further why we are proceeding in the way that we have chosen. At the moment, the CDC is a statutory corporation that is obviously not a suitable legal vehicle for the partnership. The Bill departs from the technique usually employed in privatisations whereby legislation transfers the assets of the public corporation to a newly formed successor company. Instead, the Bill transforms the CDC directly into a public limited company without creating a new legal entity. No transfers of assets are involved, because the CDC retains the same legal identity and remains in being, both before and after the transformation.
That legal technique is being used because many CDC assets are held abroad. Had the successor company method been used, every individual asset would have had to be transferred under the local laws applying in all countries in which it operates. That would have been laborious and time-consuming, to say the least. We were pleased to find such a good legal remedy to what was at first a headache.
The second area contains provisions that are needed to restructure the CDC's balance sheet. As I have explained, it will be necessary to give it a financial structure that suits the needs of the partnership. That part of the Bill also makes provision for the continuation of Government financial assistance while CDC plc is wholly owned by the Government—subject to a cash limit.
The third area is tax. Clause 27(3) says that the Act shall not come into force until a draft order that makes provision for tax treatment for the CDC has been laid and approved. As I said, I intend to table detailed amendments in Committee which will set out the tax treatment to apply to the CDC, which I described earlier.
Clause 18 entrenches the Government's role in CDC plc. As I have made it clear, the Bill creates a partnership between the Government and the private sector, involving a substantial and long-term Government interest. Given that proposal, as I have said in answer to questions, if a future Secretary of State wanted to dissolve the partnership and fully privatise the CDC, he or she should be required to seek Parliament's approval before doing so.

Mr. Rowe: A thought has just occurred to me; I wonder whether the Secretary of State could set my


mind at rest. Should the CDC incur losses over the next few years, they will not fall on her departmental development budget—will they?

Clare Short: The Department will hold a minority share; profits will go to it. It would have the same liability as the majority of shareholders if there were a sustained period of loss. However, the likelihood is that there will be gains, not losses, to the Department. A disaster would have some consequence, but it would not be major or one about which the hon. Gentleman needs to be concerned. Logically, if the thing were to collapse completely, the loss of value in shares would affect the Department.
Clause 18 entrenches the requirement for Parliament's approval for any change or desire to privatise. It does so by entrenching the two key aspects of the Government's side of the partnership: first, a substantial economic interest and, secondly, the golden share, with the important rights that it reserves to the Secretary of State. Clause 18 requires the Government to hold at least 25 per cent. of the CDC's ordinary share capital and to continue to hold the golden share. The clause cannot be amended or repealed without Parliament's consent. I think that I said to the Select Committee that I was struggling with that matter. Members of the Committee will be pleased to hear that we found a solution.
Clause 18 also prevents a Secretary of State from agreeing to changes in the CDC's constitution that would diminish the Government's rights as holder of the golden share, except with the approval of Parliament. Together, the provisions of clause 18 will ensure that the fundamental nature of the partnership, as it is being presented today, cannot be altered without Parliament's consent. I am sure that that is right.
We cannot reduce poverty in the world without faster economic growth in the poorest countries. Such growth will not be achieved without higher investment, and that requires much higher inward investment. There is massive and ever-growing capital investment around the world, but, sadly, very little of it flows to the poorest countries. We hope that the new CDC will help to improve that, both by channelling private sector investment and by acting as an example to other investment institutions, showing that such investment can be profitable. I commend the Bill to the House.

Mr. Gary Streeter: For more than 50 years, Conservatives have supported the Commonwealth Development Corporation. For 35 of those 50 years, when in government, we nurtured and encouraged it and its important work in investing in the developing world—investing in business and in people and bringing hope and dignity where there was none. During those years, the CDC created thousands of jobs and changed thousands of lives. Conservative Members pay warm tribute to the skill and dedication of its staff, who have achieved so much over the past half-century.
Today's debate is really about how we can best take the CDC into the 21st century, to help even more effectively the millions of people in the world who live in abject poverty. The words "abject poverty" are easy to say, but the misery, squalor and pain which are the daily experience of so many people alive today and which those simple words represent, must motivate us to do something

about it. I pay tribute to the Secretary of State for the attempts that she has made since taking up her post to do precisely that.
It is a good thing to care about the problems of the world's poorest, but it is even better to do something about them. The CDC has played its part in the past, and must do so in the future.
There are three key economic ways of improving living standards in the developing world. On the one hand, well-targeted aid has a part to play in meeting people's needs; on the other hand, the private sector and foreign direct investment are vital in generating the wealth and jobs that are necessary to transform the prospects of the world's poorest. Somewhere between those two key pillars has been the role of the CDC. It is not concerned with aid, and it is not—strictly speaking—the private sector. It is a vehicle for investing in small businesses, taking a stake in a community, stimulating private enterprise and supporting local entrepreneurs. That is what the CDC has been good at for 50 years. It has been a necessary halfway house between aid and private sector investment, and our role as the Opposition is to ensure that the Bill does not undermine its vital developmental role.

Mr. Rowe: I hope that my hon. Friend will include in his encomium evidence given by the CDC that, to the largest extent practicable, it has upheld a non-corrupt form of trading for 50 years. In response to a question from us, it claimed that one of its biggest single assets was the fact that its reputation enabled it to browbeat those who tried to corrupt it, and to refuse to be corrupted.

Mr. Streeter: I pay tribute to my hon. Friend, who is second to none in his understanding of the word "encomium".
I agree with my hon. Friend. We know that, sadly, corruption is a real issue in far too many countries. The integrity of the CDC, and the model that it has been able to provide over the years, have been an important part of the performance of this excellent corporation.
It is well known that, at the same time as nurturing the CDC's activities over the past 20 years, the Conservative party has been promoting privatisation and removing the dead hand of the state from many former nationalised industries. That is well known to the Secretary of State, who has opposed every one of our privatisations. Conservative Members believe in the private sector, and in marketplace solutions. I have worked as a lawyer in the private sector for 20 years and more, advising business people on, primarily, buying and selling private limited companies. I have also seen the public sector at close quarters, notably while I was a Minister in the last Government. The public sector is necessary, and can be excellent; but there are many things that the private sector can do better, and investing in businesses is an obvious target area.
For a large part of our 18 years in government, we examined ways of securing more private sector involvement in the CDC. We considered whether we could privatise it, in full or in part, and how we could harness and focus private sector energy and resources without hurting the people whom the CDC had been set up to support. The problem, of course, was finding a way in which to produce an attractive return for private sector


investors without letting go of the CDC's vital developmental nature. We could have done it easily if we had been prepared to risk hurting the poorest of the poor in the developing world, but we were not prepared to do that.
Meanwhile, while we were privatising and changing for ever the economic and industrial landscape of the United Kingdom, the Secretary of State, then in opposition, was roaming around attacking the evils of privatisation at every turn. What a delicious irony: the person who, at her core, opposes and despises privatisation and the private sector, should now be tasked with putting into effect new Labour's first privatisation.

Clare Short: There is hardly anyone here, it is a serious matter and the hon. Gentleman still has to play silly infant school games. I have been a member of the Labour party since my youth and have always believed in the mixed economy. There is a role for the state and for markets. Under his Government, the market part of the role got way out of control.
My Department gives advice to the former Communist countries and to many developing countries about privatisation. I say to them, "Learn from our mistakes. Do not give big windfall gains to the private sector. Do it fairly and efficiently, so that you get good services. Learn from the mistakes of the British Tory Government." People worldwide are doing that.

Mr. Streeter: I am delighted that the right hon. Lady has learned from her mistakes. None the less, she must accept the fact that, throughout the 1980s, she bitterly opposed every privatisation that was introduced by the then Conservative Government, who transformed our economic and political landscape.
When we heard the Prime Minister announce the privatisation, we all wondered how the Secretary of State would be able to come to terms with perhaps her greatest personal challenge to date: to privatise something that even Conservative Governments for 18 years could not find a way to privatise without hurting the people whom the CDC was set up to help.
We waited with bated breath. Surely even the Secretary of State would not be able to pull off such an amazing volte-face, but, when it emerged, the solution was a classic piece of new Labourism. We should have guessed. The solution was simply to change the name. The Secretary of State opposes privatisation, so do not call it that; call it "public-private partnership" instead. It is Orwellian double-speak at its best.
The Bill converts the Commonwealth Development Corporation into a Companies Act company, of which up to 75 per cent. will be sold in one tranche to the private sector, with provision for the remaining shareholding to be sold in due course. It is privatisation in all its glory. It may be a partial privatisation to start—up to 75 per cent.—but that is how many of our privatisation took place in the 1980s. It is privatisation. If it looks like a dog, walks like a dog and barks like a dog, it is probably a dog. The Bill will privatise the Commonwealth Development Corporation. I know it, the Secretary of State knows it, the whole House knows it.
Therein lies my concern at what the Secretary of State is trying to do with the CDC. It is not that introducing the private sector is, in itself, wrong; of course not. We of all

people would be hard pushed to argue that. It is that the Secretary of State is not owning up to the reality of what she is doing. If she does not face up to the reality of what she is doing, she will inevitably be blind to the dangers and pitfalls of taking the CDC down the path that is set out in the Bill. There is a real risk that the CDC will be sold cheaply, shareholder pressure will take it away from its developmental objectives, and the people whom the CDC was set up to help will be left behind.
During the passage of the Bill, our aim is to ensure that those dangers have been fully and properly considered and that, when we finally come to vote on Third Reading, every hon. Member can do so in the full knowledge of what they are doing. It is like that with the Government: if people want to know what they are doing, never mind the headlines, read the small print.

Dr. Jenny Tonge: I am sure that the hon. Gentleman speaks from great experience about selling things off cheaply, but, before he goes any further, can he make it absolutely clear that his party sees no other way: either the CDC is a Government-owned company, or it is privatised? He is saying that his party sees no middle road whatever. He has made a categoric statement this afternoon.

Mr. Streeter: There is, of course, a case for retaining the CDC in the public sector while seeking to improve its performance. There is also a case for fully and properly privatising the CDC, and for at least obtaining a proper return for the Department for International Development budget. However, there is absolutely no case for selling the CDC off cheap—so that, over time, shareholders will inevitably and increasingly force its board to consider primarily the bottom line, thus moving the CDC away from its developmental objectives. That is the prospect staring us in the face as we consider the legislation, and that is my concern.
We shall not divide the House on Second Reading. However, in Committee, we shall want to explore in detail four key issues. First, have the CDC's developmental principles been adequately protected; or will the Bill destroy that heritage? Secondly, will the Department for International Development budget receive a fair price for our taxpayers' investment over the past 50 years? Thirdly, will the privatisation protect the poorest in the developing world—the very people whom the CDC was established to help? Fourthly, do the Government's proposals for the tax treatment of the new CDC deserve our support? Unless we are satisfied on those four key issues in Committee, we shall reserve our position on Third Reading.
Once private sector shareholders are involved, they will want to drive the company to increased profits and better returns on their investment. Such a development is inevitable, entirely natural and understandable. Therefore, the question is whether the Bill will secure the CDC adequately to its developmental moorings, to prevent it being driven out to the sea of commercial return, leaving behind the reason why it was established initially.
If the Bill is passed as drafted, the way forward is sadly clear. It is likely that, in a year or two, 75 per cent. of the company will be sold off, probably—as the CDC's financial track record in recent years has been so modest—at a bargain-basement price. Investors in the


company will be pension funds, which are able to bide their time and to see a long-term opportunity. After a few years of the CDC seeking to strike a balance between developmental objectives and making a return for its shareholders, the company will almost certainly fail.
The CDC's rate of return is less than 8 per cent. It will have to get that up to 15 per cent. or more, and that will be hard to do unless it is guided only by bottom-line considerations. The Secretary of State explained that the CDC will be able to increase its rate of return from 8 to 18 per cent., primarily by shifting money from secured loans to equity investments. Of course it is true that potentially greater reward may come by investing in equities rather than loans, but the risks of loss also may be greater.
There is absolutely no guarantee that moving from secured loans to unsecured equities will boost returns. If there were such a guarantee, why do not all United Kingdom banks forget about lending money to companies and simply invest in share capital? The point of risk capital is that one may not only increase one's return, but lose one's investment.

Clare Short: Does the hon. Gentleman think that it is possible for the poorest and least-developed countries to attract private sector investment? If he is right in his critique, no investment in those countries will be attractive to the private sector. Although I know that he is wrong about that, perhaps he will either agree that he is wrong, or state plainly that he believes that those economies will never attract private sector investment and, therefore, are in long-term difficulty.

Mr. Streeter: I do not think that the Secretary of State is listening to me—I was not saying that at all. One of the points that I shall make in a moment is that many private sector investors are already investing in those emerging markets. However, the CDC that she is shaping for the future will simply become another investment bank or investment fund manager. Unless we get the matter right—this is why we have to examine it very carefully in Committee—the CDC will not be distinctive from any other fund manager.
Of course we want private sector investment in emerging markets, but such investment is already being made. Surely it is right that the CDC should play a particular and peculiar role in development, as it was established to do.
I am not saying that it is wrong for the CDC to move from loan to equity. I am simply saying that, in a volatile market, such a move may not offer the panacea that the Secretary of State believes it will. What will happen if investors in the new CDC do not receive the rate of return that they are expecting? She has not answered that question.
The directors of the CDC are people of good faith. They will try hard to meet the financial targets, while remaining true to what they understand to be the CDC's developmental focus. We wish them well and hope that they succeed but, if the rates of return are not adequate, the shareholders will gradually turn the screw, insisting on higher-value investments and better returns. Gradually, the developmental focus will be all but forgotten as the new CDC becomes just another investment bank or fund manager. I have noticed before that, when the Secretary

of State knows that she has lost the argument, she starts chatting to the person next to her. I wish that she would listen. She might learn more about the industry.

Clare Short: rose—

Mr. Streeter: Does the right hon. Lady want me to give way?

Clare Short: That is what standing up at the Dispatch Box means. I was saying to my hon. Friend the Under-Secretary, "Poor chap, he cannot seem to understand how the entrenched requirements on the proportions of investment make what he is suggesting impossible." I was listening to the hon. Gentleman. It would have been rude to make my comment loudly, so I made it quietly, but as he wants me to be rude in public, let me be so.

Mr. Streeter: I am grateful to the Secretary of State, because she has made my case. I shall explain why she has not entrenched the developmental objectives of the CDC in the Bill. She thinks that she has done so by saying which countries the CDC can invest in, and through and by the incorporation of the statement of business principles, but that does not protect against shareholders wanting to take the investment portfolio away from creating jobs and investing in long-term communities in the developing world and putting it into high-value, high-tech investment that will result in the CDC being no different from any other investment bank or fund manager. She has not entrenched that principle properly. The shareholders will gradually turn the screw, insisting on higher-value investments and better returns. Gradually, the developmental focus will be all but forgotten as the new CDC becomes just another investment bank. The CDC that is filling the vital gap between aid and the full-blown private sector will, little by little, inch by inch, relocate itself firmly in the private sector investment camp, leaving a huge void behind it.
I do not take any pride in saying that. I wish that the truth were otherwise. I want the plan to succeed, but the Secretary of State expects us to vote tamely for the Bill. She hates criticism and questions. I am simply trying to point out to her that she may not have achieved her objectives. I wish that she had discovered a magical way of combining two mutually inconsistent principles—riding two horses at the same time—but I fear that she has not. It is likely that, within a few short years, all the noble aspirations of the CDC when it started 50 years ago will have been left behind.
The Secretary of State thinks that she has entrenched the CDC's development principles but, after closer examination, I fear that she has not. I was sent the statement of business principles on 11 May. It is a worthy document and I do not disagree with a single word in it. It contains some excellent phrases. It says:
The way we do business is to set out in our mandate:

To maximise CDC's success in creating and growing long term viable businesses in developing economies, achieving attractive returns for shareholders and implementing ethical best practice.
It says that the CDC will
"be open and honest in our dealings, while respecting commercial and personal confidentiality".
It talks about the core values, saying that it will
"recognise that economic development results in environmental change"
and that
Sustainable development seeks to maximise the potential of environmental resources".
It is all good stuff and I support it. However, the mission statements and developmental principles of other large corporations use almost identical language. Shell says:
We aspire to be a leader in the economic, environmental and social aspects of everything we do; first choice for our shareholders, our customers, our employees, those with whom we do business, society and future generations.
We will strive to help to build a better world in which current and future generations enjoy greater economic, social and environmental security.
We will embrace the concept of sustainable development in our business decisions, large and small. In this way we will continue to create value for our shareholders and society, while being responsive to society's changing expectations.
I do not criticise the CDC's business principles, and I certainly do not criticise Shell's. I simply say that the adoption of those principles by the CDC is no more than any major international player does these days. It is part and parcel of today's global business environment, and it does not protect the special developmental status of the CDC.
The principles do not in any way prevent the CDC from investing in top-drawer, highly successful companies which make high-tech products, employing only a handful of local people, in the permitted countries. Nothing in the statement of business principles prevents that investment from becoming the norm. If I am wrong, the Secretary of State can intervene and tell me so.
The second attempt at entrenchment is to insist that 70 per cent. of all the CDC's investments are limited to an agreed number of developing countries, 50 per cent. in sub-Saharan Africa or south Asia. That is set out in the investment policy and, again, I support it. There is a long list of countries—involving about two thirds of the world—including South Africa, India, China, Zimbabwe and Kenya.
Surely the Secretary of State will not pretend that that measure prevents the new CDC from becoming a commercially driven investor in those emerging markets, no different from any other such investor. That is already happening. When I was in Kenya recently, I spoke to one of the CDC's field managers, who was being instructed to move away from the long-term, job-creating, community-focused investment on which the CDC has built its reputation. He was now being encouraged to look at shopping malls, office complexes and high-tech companies—sectors in which several other private investors are operating.
There are examples of fund managers investing in emerging markets. Perpetual Investors talks about its funds in Thailand, the Philippines, India, Taiwan, Indonesia and Malaysia. Genesis Emerging Market Funds has significant investments in Botswana, Ghana, Jordan, Kenya, Lebanon, Mauritius, Oman, Saudi Arabia, South Africa and Zimbabwe. Hundreds of private sector investment organisations are beginning to invest in the

emerging markets—and a good thing, too. My concern is that others are doing what the CDC is gradually going to get into.
The moorings to which the Secretary of State is attaching the new CDC are too weak, and the currents tugging the new CDC out to sea will be strong, and will get stronger. We know that a burgeoning private sector is the very thing that those developing countries need, but other organisations can help provide that. The Secretary of State is not facing up to the radical change of direction for the CDC that she is instigating. Unless we can strengthen the Bill in Committee, the likelihood is that, in not many years, the CDC will have floated free from its developmental moorings. The House should consider the Bill in the light of that clear risk.
A host of other matters need to be looked at carefully in Committee. The tax treatment of the CDC is a critical concern. As long ago as 7 July 1998, the Select Committee on International Development was told by the Secretary of State that preferential tax treatment would be forthcoming. She explained that it has been longer in coming than she would have liked, and that is fair enough. However, it is disappointing.
The House of Commons is debating the Second Reading of a major Bill, which has the consequences that I have explained. The tax treatment is at the centre of whether the company succeeds and flourishes in the private sector. We do not have a scrap of paper that tells us what that tax treatment is. That is not good enough. It is all very well to say that it will be brought before us in Committee, but the Committee is likely to start in a fortnight. Surely we could have the information now. We must reserve all our positions in relation to the tax treatment of the company.
Is the Secretary of State really saying that the Government will create a special tax status for one company in the United Kingdom, 75 per cent. of which will be owned by the private sector? What an extraordinary idea. She says that going offshore would be wrong. What is wrong with CDC funds going offshore? Has she consulted the Prime Minister, who talks about globalisation and our role in the global economy? Why is placing funds on a tax-efficient offshore basis politically unacceptable?
It is an abuse of the House to treat us in this way. We want to consider carefully the balance sheet of the new CDC; to clarify the future position of Government guarantees and soft loans; and to know when it is intended to float or sell off the newly created shares. We want to explore all those matters in great detail in Committee.
The Secretary of State must think again. She believes that she has discovered a third way in investment in developing countries—a private sector that will be content with pursuing developmental objectives at a modest rate of return—and that, by calling it a public-private partnership, rather than a partial privatisation, she has cut the Gordian knot that prevented us from taking that step; but there is no such third way.

Mr. Leigh: The Government are retaining less of a share in the new company than the Conservative Government retained in a privatised British Telecom; and we retained a golden share for many years. I am also worried by the fact that, as the corporation is keeping 39 per cent. of its return on capital


employed—£468 million—it could be a target for predators. It will be a private company and there is nothing in the golden share to deter predatory interest.

Mr. Streeter: My hon. Friend makes an extremely important point. There are real concerns and fears. That is why I say that the enshrinement and entrenchment that the Secretary of State thinks that she has achieved may not be in place. That is why we need line-by-line scrutiny of the Bill. I warn the Minister that we will spend a long time in Committee. There is an awful lot to consider. I hope that the Secretary of State will be there, too, because decisions will have to be made. We intend to table sensible amendments that the Government will want to consider and, probably, accept.
My hon. Friend is right to say that this partial privatisation is extremely dangerous and could well hurt the very people whom the corporation was set up in 1948 to support. The way that the Secretary of State has chosen is self-deluding and potentially dangerous. I know that she does not like criticism, but I urge her to consider carefully what I have said. There are real dangers. I urge her to be flexible enough to allow the Bill to be strengthened in Committee.
No one could support private sector involvement more than Conservative Members, but we are not prepared to see 50 years of precious heritage sold off cheap and on false pretences. We will not stand by quietly and watch as the people of the developing world lose a vital lifeline to dignity and prosperity.

Angela Smith: I have listened with great interest to the debate this afternoon. It seems to me that the hon. Member for South-West Devon (Mr. Streeter) has missed some crucial and fundamental points. It is worth reminding the House that it was a Labour Government who established the Commonwealth Development Corporation in 1948. Then, as now, Labour Members recognised our wide responsibilities throughout the Commonwealth and the world. The object, which we will continue to stick to, is to invest in the world's poorest countries.
Since 1948, the corporation has become one of the world's leading providers of development finance. I am loth to cite statistics, as one can lose what is behind the figures, but it is worth noting that £1.6 billion is being invested in more than 400 enterprises in 54 countries. That is practical aid and support, especially for those smaller enterprises that would not attract major international finance.
We can note with interest some of the investments that have been made. I was surprised to learn that £4 million was invested in the largest poultry farmer in Nicaragua; £4 million in the Ugandan textile industry; and £13 million in the Philippines cement industry. Those investments would not have been gained from large international financial companies, but they are absolutely crucial to the companies and communities involved, bringing local sustainable development. The finance and support has gone to those countries that have the most underdeveloped private capital markets and the least capital. By contrast, the majority of private investment has gone straight to the wealthiest developing countries.
It is worth reminding the House of the statistics, although they cannot show the real pain that lies behind them. One in four people lives on less than $1 a day. The scale and depth of poverty cannot be conveyed by statistics. They do not convey the individual suffering and misery. When people can die from poverty, not just from starvation, we have an obligation to help those on the margins of life. Extra ethical investment can be of great help and, for some people, is a matter of life and death.
Both sides of the House can agree that we can be proud of the work that the CDC has undertaken. Given that success, any change would be viewed with caution. However, we have to seek ways to build on that success. Many of us believe that there should be more private investment in those areas of greatest need. The Bill and the new arrangements for the CDC can help to bring that about.
First, the Bill will enable the CDC to raise private sector capital to increase private investment in the poorest countries. In addition, it aims for long-term partnerships between the private and public sectors to bring about the sustainable development that is so crucial. Perhaps most importantly, it will also ensure that we use the CDC's commitment to ethical business practice to enhance ethical, social and environmental awareness and to encourage private investment to sign up to those concerns. Enhanced business investment is good if it helps poor people and if the social elements and environmental policy are good.
If the Bill is successful, it could be a model for other countries that want to work with private business to encourage ethical overseas investment. We have in the CDC a unique asset, with unique experience. We have a duty to use that and to do what we can to extend it. What distinguishes the CDC from other investments is its ethical stance, and I welcome the assurance from my right hon. Friend the Secretary of State today that that is foremost in her mind. The Bill could open up new opportunities for investment and development. More importantly, it will build on the important work that has already been undertaken. The CDC will use the experience of staff in offices in 27 countries to continue its work.
Today, we seek to improve and extend business investment by offering the support and advice of the CDC to target finance where the need is greatest. That is where the challenge lies—to ensure that the focus continues on the poorest countries and communities. Because of the success of the CDC, we should view any change with caution, but I welcome the Department's consultations and discussions with the NGOs. It is essential that they are involved because their expertise is key.
It may be a couple of years before market conditions are right for establishing the partnership. I ask my right hon. Friend the Secretary of State to consult widely on the composition of the board. Business and commercial interests are essential, but she will need to satisfy herself and those who have an interest in the partnership that the board and board members have the knowledge, experience and—especially—the commitment to undertake that vital role. It is also crucial that board reports should be available for scrutiny by Members of Parliament, because we will wish to review and examine the successes. Those will need to be open to public debate. Where the structure works well, other countries may follow. It is more difficult—but necessary in the interests


of transparency and accountability—to allow Parliament the responsibility and the opportunity to review areas that may fail. We need to ensure that we can discuss those openly and to learn any lessons necessary. If we wish to use the partnership as a model, we must ensure that other countries also have the opportunity to learn from our mistakes as well as our successes.
I welcome the fact that the Government will hold the golden share. Unlike Conservative Members, I believe that to be crucial and I welcome the Government's commitment to it. Even when 100 per cent. of ordinary shares have been sold to the public, the Government will still have that golden share. It does not give voting rights, but it allows a member of the Government—preferably the Secretary of State—to attend meetings and to speak at them. That is important, as it ensures that development remains at the heart of the CDC and the reason for its existence. That will ensure that the Government's ethical policy remains in place.
I began by stating that a Labour Government established the CDC in 1948. The Bill changes the organisation but its provisions, if used effectively, will build on and develop the CDC's existing role, and bring more private investment to the very poor developing countries whose needs are the greatest.

Dr. Jenny Tonge: Liberal Democrat Members welcome the concept of the Commonwealth Development Corporation becoming a public-private partnership. We do not agree with the Conservatives that there is no middle way. Of course we do not: we believe that there has to be, or we would not be Liberal Democrats. The Bill offers the potential that more money and investment will go to developing countries. We appreciate that, although good development practice must emphasise education—especially for girls—and health issues, which must be accompanied by economic development.
I am a member of the Select Committee on International Development and, from the countries that I have visited and the Government officials to whom I have spoken, it is clear that there is a desperate need and desire for investment and development. However, I regret to say that, so desperate are they for growth in their economies, they tend to dismiss questions to do with the environment, labour standards or sustainability. I shall return to that later.
We have no objection to the concept of a public-private partnership in this context. We support it, provided that it really is the best way forward, and provided that the Government guarantee that it will not mean that, ultimately, there is less money in the development aid budget. If the public-private partnership fails—I shall express many reservations about it—will the Government ensure that the promised increase in funding for developing countries will continue and eventually reach 0.7 per cent. of gross domestic product?
The problems of the poorest countries are legion. They include bad governance—which is not helped by those countries' colonial past—environmental disasters, civil wars continuing and breaking out all the time, and the AIDS pandemic. In some areas, the disease affects up to

25 per cent. of the population and, sadly, many of those affected are the economically active. All those factors, and others, make investment in those countries risky and unattractive.
However, the past record of the CDC bears examination. We have heard a lot about the CDC's virtues from the hon. Member for South—West Devon (Mr. Streeter). The CDC has been able to take risks that the private sector could not take. Funded by Government loans, it has not had to achieve high financial returns: its target has been a three-year average return of 8 per cent, and it has been able to receive UK Government backing to access markets closed to private investors.
The Bill aims to ensure that the CDC will still be able to do its development work while at the same time attracting private capital, but will it succeed? I confess to being sceptical about the match between development objectives and the financial requirements of markets. My gut reaction is that it cannot work.
I was interested to read in today's newspapers that the chief executive of the Commonwealth Development Corporation is to leave the organisation. Either he thinks that the concept behind the Bill is brilliant but that he is not up to the task, or he thinks that it is lousy and he wants nothing to do with it.

Clare Short: The chief executive is a very fine man who strongly supports the Bill. We have worked closely together on the proposals. He is coming up to 60 and wants to be replaced before the transformation so that the organisation goes from strength to strength. He will do so in all honour and with the full agreement of the Government. There is no suggestion that he has any criticism of the Bill, nor that we have any criticism of him. It is a question of his age and of ensuring that the CDC is led by someone who can see it through its transformation period. I think that it is important to have that clarification on the record.

Dr. Tonge: I am delighted to hear that, and glad that the Secretary of State has had an opportunity to say so. None the less, I share many of the reservations expressed by the hon. Member for South-West Devon.
I must confess that I have no experience of investment or the workings of the City. My lifetime investment has been in my children and in working for the national health service, a very public company, though perhaps not, I suspect, for much longer. Nevertheless, I have considerable reservations. The International Development Committee was told that private investors are interested in ethical investment. We were also told, conversely, that the companies looking to sustainable development in low-income countries are few and far between. The ethical investment market currently amounts to £2 billion per annum, a tiny proportion of the entire market.
The CDC's returns in 1998 showed a loss of 3.4 per cent. compared with a modest Government growth target of 8 per cent. The CDC is not currently required to pay any interest on loans. In future, the CDC will aim at an overall rate of return of 15 per cent. in order to attract private investors. I simply cannot see how that can be achieved without compromising the purposes of the CDC.
We were told that there have been special factors recently in India and Pakistan, in which the CDC has experienced huge difficulties that affected the rate of


return. Emerging markets have been turbulent, but there will always be countries in difficulties. The areas that really require CDC attention, such as sub-Saharan Africa and south Asia, have far more serious problems than those of India and Pakistan, and conditions there are much more turbulent. Those are the countries most in need, and I am sceptical that the project will benefit the poorest of the world.
We have heard something about taxation, and I shall not—indeed, given my background, I could not—go into it in great depth. However, the Bill is only half a Bill as the detailed tax proposals have not been put before us. No doubt, greater business minds than mine will tackle the tax proposals in Committee, but I feel that it insults the House to fail to table those proposals with the Bill.
The Secretary of State said that an offshore banking arrangement would be unacceptable. She previously told the Select Committee that such an arrangement would be intolerable. Tailored tax arrangements have been announced to put the CDC in a special category. How fair will that be for other companies that trade ethically? We must see the detail. I am unconvinced that the CDC can be a one-off case in a special taxation category, and I hope that the muddle can be sorted out satisfactorily in Committee.
The CDC sent the Select Committee a copy of its business principles before the Bill reached Second Reading, and they are laudable. The CDC aims to implement the best ethical practices itself and in all subsidiary companies that work for it. It will exhibit "honesty, integrity and fairness." It will employ good environmental, health and safety, and social issues policies. However, the document is full of verbs such as "recognise", "seek" and "identify". I should prefer it to contain words and phrases such as "insist", "enforce" and "make legally binding". The document reminds me of the Organisation for Economic Co-operation and Development code of conduct for multinational enterprises, which is advisory and full of hope but which contains no compulsion. We have heard it all before, during the negotiations on the multilateral agreement on investment.
We all know that multinationals—unlike the hon. Member for South-West Devon, I shall name no names—produce glossy brochures containing codes of conduct. Sadly, we also know that the companies do not always adhere to them. We understand that the Governments of poorer countries are responsible for ensuring the protection of their environment and the welfare of their people. However, they are desperate for investment and industrialisation and they are tempted to turn a blind eye to bad practice. The CDC must not be allowed to follow that path.
The so-called golden share, held by the Government, is claimed to be the mechanism by which CDC investments will be reviewed and monitored. Will it ensure a legally binding adherence to the business principles set down by the CDC, and will that cover any subsidiary companies? Or will a thin veil be drawn over that aspect of CDC business so that investors can be attracted?
My final concern is the percentage of CDC business that will be done in the very poorest countries, such as those in sub-Saharan Africa and south Asia. What percentage will be done in countries in which a larger return on investment can be assured? The Government

require that at least 70 per cent. of investment should be in poorer countries. That is fine, and we have heard today which countries are the poorest.
The Government also require that the CDC should aim at 50 per cent. investment in sub-Saharan Africa and south Asia, where the poorest people of the world live, but if the Government wish to stick to their White Paper's excellent aspirations, which we all support, they must not "aim" but insist that those countries receive 50 per cent. of the investment. Furthermore, they must insist that that investment helps the poorest of those countries, not lining the pockets of the wealthy and corrupt.
If the Government insist on those things, will the CDC be able, given all the problems in those countries, to attract sufficient private investment that will provide a good return for shareholders? I fear that it will not. A memorandum to the Select Committee from Sir Michael McWilliam, a former member of the CDC board, pointed out that
"the CDC should be made to satisfy two masters—the God of the Development Community and the Mammon in the City."
It remains to be seen whether the CDC can deliver.
The Liberal Democrats will not vote against Second Reading, but we hope that problems will be addressed and resolved in Committee. Unless they are, the Government will not achieve their noble purpose of seeking to alleviate poverty in the world.

Dr. Doug Naysmith: Thank you, Mr. Deputy Speaker, for allowing me to make a few remarks in this important debate. I do so with a little trepidation, because I feel very much an amateur in this area, and I know that most hon. Members present have much more experience of development matters than I do. Nevertheless, as a long-time member of the World Development Movement and a supporter of other charities and pressure groups that aim to redress the clear imbalance between the richer, mostly western nations and the poorer, developing countries, I welcome the Bill. In particular, I welcome the safeguards outlined today by my right hon. Friend the Secretary of State.
The Bill has benefited from the scrutiny that it received before it came to Second Reading. It started life in the other place, and it has been well aired in the Select Committee on International Development. The Government have promised that that type of pre-legislative process will become more common. Apart from the Financial Services and Markets Bill, the Immigration and Asylum Bill and the draft Food Standards Bill, the process has not yet become the norm. I look forward to the process happening more frequently in future, and I welcome today's publication of a draft Freedom of Information Bill.
I support the Bill, which will convert the CDC into a plc with a difference. The public-private partnership and the ability to attract private sector funds into parts that other public limited companies cannot—or will not—reach will be important. However, the difference that an ethical dimension will build into the whole project is even more important.
From reading the transcripts of previous debates and evidence sessions in Committee, it is obvious that the CDC is already a well-respected vehicle, which has


supported much high-quality development work—at present, about 400 projects in 50-plus countries. It is also obvious that many people who know a lot about these matters feel that much more can be achieved if private sector investment can be levered in where it is wanted and needed. The CDC has not been able to support as much potential development as it could have, at least partly because of Government financial rules and the limits on Government expenditure and because, unfortunately, direct state involvement can sometimes be a disincentive to prospective private partners.
It is clearly the case, however, that the Government's known commitment and explicit priorities for development help to establish trust. Much, of the CDC's success has come from its close ties with the British Government. Therefore, the loosening of those ties must be undertaken with care.
Probably the most important feature of current CDC projects is that a high proportion of them—as high as 80 per cent., and a mixture of equity and loans—are in the poorest developing countries, which are those with a per capita gross national product of less than $1,600 or thereabouts. Certainly that should continue to be the case, and it has been mentioned in virtually every speech today. The eradication of poverty must continue to be the aim.
Existing policies try to ensure that supported projects are economically and commercially viable, sound in development terms and satisfactory when judged as ethical businesses. Christian Aid has advocated social and environmental impact assessments before investment decisions are taken, and independent monitoring of codes of conduct for ethical businesses in each country.
If it can be shown that private investors can achieve attractive returns in the markets of the poorest countries without exploitation, it will be of great value. Christian Aid has also welcomed the Government's decision that proceeds from the sale of holdings in the CDC should be used to boost the aid budget. That should certainly happen, with the proviso—unnecessary, I hope—that they are an addition to an increasing aid budget and not a substitute for part of it.
The Government have already done much and they intend to do more to protect the CDC's development role, particularly during its transition into its new form. Despite the strictures of the hon. Member for South-West Devon (Mr. Streeter), many non-governmental organisations already believe that there are sufficient protections.
The concern now must be that the CDC must become sufficiently attractive to investors so that it can run successfully as a business. Judging by the story in last Friday's Financial Times, it may yet be some time before the CDC's investment portfolio is in shape to attract private sector investment, but the Secretary of State has explained the background to that story. Nevertheless, the aim must be to complete the legislation and put the change in place as soon as possible, so that there is no delay when the time is right to set up this public-private partnership.
I support the Bill and wish the CDC every success in its new form.

Mr. Bowen Wells: The hon. Member for Bristol, North-West (Dr. Naysmith) anticipated how I intended to open my remarks by

describing the two reports of the Select Committee on International Development on the subject as a pre-legislative process. One of the few recommendations of the Committee that the Secretary of State has not been able to honour—it is not her fault, but that of the organisers of Government business—is the recommendation that the Bill be the subject of a pre-legislative process. We have done our best to take evidence on the subject and we published it in two reports, the last of which was published about a month ago. I hope that the House has found that useful.
As the hon. Member for Richmond Park (Dr. Tonge) explained, that report contains much of the detail that the Secretary of State proposes in the Bill. Indeed, I would say from the outset that the objective of the Bill is one that we would all wholeheartedly embrace. The Government are attempting to expand the Commonwealth Development Corporation so that it can take on more business and expand the private sector into some of the more difficult countries of the world and act as a catalyst to bring in other private sector investors and local investors to enhance the private sector in those countries.
As the White Paper, which the Secretary of State introduced, straightforwardly states, development will take place not simply through aid, but through the private sector—through which there has been a much larger flow of funds to developing countries than that from the aid budget, even given the increase that the right hon. Lady managed to secure from the Treasury. I thoroughly congratulate her on that, but it will not be a fraction of what we could and should anticipate coming from the private sector.
The Bill, which will enable the CDC to be used as a vehicle for private sector investment, is to be wholly welcomed. We must also welcome the fact that the CDC in its new form will bring more and not less money to the countries involved, in particular the poorest countries in which it is difficult for the private sector to operate.
The devil is in the detail in this Bill, as the Select Committee said. The Secretary of State has managed to answer most of our questions about documentation—the publication of the articles and the memorandum of association, and the details of the special share and the development policy to be followed. We have been able to examine those in detail. Indeed, we know the business principles and ethical investment policy that the CDC will pursue. Together, those present a considerable burden and onus on the CDC, which might act as a detriment to attracting sufficient private investment, although I hope that they will not.
I shall recall some of the achievements of the CDC for hon. Members because those will inform the House about how it will have to change when it is in its new form. There are some worries. As the House knows, I had the honour and privilege of serving the CDC as an employee for nearly 15 years. In that time, we undertook many developments, many of which were highly successful. As the hon. Member for Bristol, North-West remarked, they relied on the relationship with the Government. Low-interest loans received from the Government enabled the CDC to carry out the work. The Government thought that the CDC filled a special niche, as was set out in the Bill that set it up in 1948. It was not to be a competitor with other private investors; it was to fill a niche where private investors could not or would not dare to tread.
One of the CDC's early investments was in Swaziland. The then King of the Swazis negotiated with the CDC a long lease on large tracts of hillside that had been denuded of all vegetation. The CDC found that the Caribbean pine tree—which agriculturalists had located in Belize—would grow well on the high plateau lands of Swaziland. It invested in clothing the hills with a large forest, which took about 13 to 15 years to mature—because of the conditions in Swaziland, the trees grew faster than they do in the Caribbean. The forest gave rise to an industry in wood products, which still flourishes today, and a mill to produce pulp for paper was founded in the country as a result. The partnership between the King of the Swazis and the CDC has greatly promoted the Swaziland economy, not only by creating a new forest and paper products industry, but by major investment in sugar through the Swaziland irrigation scheme. That has been a huge success and a training farm is based there that helps many African and other agriculturalists to learn the latest techniques in tropical African agriculture. That improves yields and people's ability to feed themselves and to produce cash crops to sell worldwide.
That is the sort of thing that can be done with long-term loans that do not require dividends or returns on capital for 15 years while the trees grow. Another investment was required in the factory that produces the pulp, and a further one in a railway line from Swaziland to ports in South Africa and Mozambique to allow export of products to South African or overseas paper producers. A private investor would be loth to undertake such a scheme because of the time taken for the investment to reach maturity. It was that niche that the CDC filled so brilliantly in that example.
Another example from Africa is the CDC's investment in Kenya in the production of coffee and tea by smallholders. Those products now head the lists of Kenyan exports. That resulted from a land reform achieved by a former chairman of the CDC and Governor of Kenya, Sir Evelyn Baring. With the co-operation of the people around Nairobi, he reorganised landholdings to bring together sufficient acreage of farmland to enable people to grow coffee and provide a farm for themselves to sustain their families and produce surpluses to sell in the market. Co-operative tea and coffee factories were set up and have been a huge success.
The only worrying thing is that the theory that people produce fewer children as they get richer has proved mistaken in this case, because they have become more productive in that respect as well as in tea and coffee. Economically, and in terms of producing independent people who can vote, pay tax and participate in their country's democracy and civil society, the project has been a huge success. Again, the success was due to the sort of finance provided by the CDC. Organising smallholders is not the most profitable activity in developing countries, but that was what the CDC did in producing first-class development.

Clare Short: I pay tribute to the hon. Gentleman and his colleagues for their valuable work. If the poorest countries cannot attract investment on terms other than those that he describes, is not the future gloomy? If it is not possible to find beneficial, commercially interesting investments in those countries, they will be marginalised from the world economy. The south-east Asian countries, which have had the biggest reduction of poverty in the

past 50 years, received aid to invest in education and health, but they created conditions that attracted large-scale private investment. That is what caused the major advance. I respect his argument, but it worries me. If the CDC cannot make the transition that we seek, the prognosis for the economies of the poorer countries is gloomy.

Mr. Wells: I could not agree more. I am describing the role that the CDC played in initiating development where previously it was not happening. That has led to other, greater development. In Malaysia, the CDC pioneered the diversification of the economy from simple dependence on rubber plantations into palm oil, which is now its second or third largest export. Once diversified, the economy was less dependent on one product. Both industries generated funds that attracted further investment to process the rubber and palm oil. That provided the revenue for the Government to increase investment in health and education. Malaya's economy is now described as a tiger.
Countries have to move to the bigger league, if I can call it that, to allow real investment—the private flows from which Malaysia has benefited so hugely that it produces motor cars and exports them to this country. The CDC has not taken part in those much more profitable and normal investments. I shall not take too much more time wallowing in past successes. What the Secretary of State is trying to achieve needs to be achieved, but it will come at the sacrifice of some of what the CDC was able to do in the past.
On handling finance, the need to locate the CDC offshore and shield some of its investments from exchange risks is shown by the housing market. CDC investment in housing has diminished over the years, because if pounds are used for long-term investments in housing mortgages, the money has to be returned to pounds from the local currency 20 years later when that currency may have been considerably devalued. That not only affects the interest repaid on the loan, but means that the money is repaid in, for example, devalued Guyana dollars. I was involved in housing mortgage finance in Guyana; a factor of 60 times what the money was worth when it was invested is involved. In purely financial terms, housing was a bad investment.
The new CDC structure may allow it both to borrow Guyana dollars and avoid the exchange rate risks. If that is tax free, it will not be taxed in Guyana or the United Kingdom, so it can roll over. I hope that the CDC will be able to undertake such investment, which will enable it to contribute to a valuable and profitable housing market, alongside other investors. Throughout Africa and Asia, there is a huge need for extra housing development. Social housing is also needed, but such investment will help with that because building housing for people who can afford to buy it means that people who cannot will be able to move into the houses vacated by the buyers. There are many opportunities of a different character. As I have shown, we are changing the character of the CDC profoundly by altering its financial arrangements and putting it largely into the financial sector.
The CDC executive was told that it should not engage in refinancing. If some company or group was willing to make an investment in a power or hotel company, the CDC would not invest. It would say, "If you think it is viable and you can make your money out of it in the


private sector, you go ahead; the CDC will not bother." However, in the small Caribbean islands, the CDC was the first investor in international tourism. In St. Lucia, Antigua and Grenada, the first international-style hotels were built by the CDC and completed in 1962. That was the foundation of tourism in that area.
The then chairman of the CDC, Sir Nutcombe Hume, said that he would never invest in international tourism because that was not what development was about. However, he did so because no one else would invest in those hotels. That started a huge new industry. Indeed, in terms of earning power, tourism is the only viable and buoyant industry in Antigua, Grenada, St. Lucia and Barbados. The CDC was an initiator of such investment; it took a highly developmental role, of which we can all be proud. The Labour Government who set up the CDC, successive Governments and all those people employed in the CDC have worked hard to bring that about.
Members of the executive of the CDC were not interested in investing in equity; they were told not to do so. Now, the reverse will take place—it is already beginning. The reason for not going into such investment was that it was much more risky. There is a banking principle that one does not use loans—with which the CDC was financed—to invest in equity, with all the attendant dangers: when the money would be repaid; when the dividend would be received; or whether the dividend would be enough to repay the loan and the interest in due time. That will change, and so the character of the CDC will be greatly changed.
That change could make the CDC more, rather than less, viable, provided that we get right those details to which the Secretary of State referred in her introductory remarks. The question of tax is absolutely crucial. We shall have to go into that matter in Committee, and examine exactly how it will apply. According to my notes, we were talking about exemption from capital gains tax and chargeable gains. That matter needs further exploration in Committee, to ensure that the CDC is not put at a disadvantage when investing alongside other private sector companies, which will be keeping their money offshore. Such companies would not be taxed in this country and would be able to recycle their money and reinvest it overseas without having to bear the tax that the CDC would have to pay if it did not have that tax exemption. If we put the CDC into that position, it would be unable to invest alongside other private sector investors, which is one of the Secretary of State' s major objectives, and one that I very much welcome. The CDC should be involved in such investment, not only in partnership with other international lenders, but by gathering together and harnessing capital in the countries themselves. It should be working alongside those countries, both in investment and in management.
I hope that one of the features of the existing CDC that will be retained is the capacity for investors to manage their own investments. In the many difficult political circumstances and in the potentially unstable economic conditions of the least developed world, that is probably the only real security for investors. If they manage the project or are responsible for its management and can decide who to recruit and appoint, there will be a degree of security that cannot be provided in any other way. In so doing, they will be giving an example to local people

as to how to manage properly and efficiently. They will be able to train local people as managers. That would be one of the most effective developmental strategies that we could undertake. I hope that we shall encourage the CDC to continue to manage projects overseas, albeit with an equal opportunities programme to bring in women. People from the country concerned and from other countries should be involved and moved around, as the CDC has begun to do. It should do that even more and should carry out appropriate training.

Clare Short: As the hon. Gentleman will know, the Department has a holding in the European Bank for Reconstruction and Development. The bank's chief economist, Nick Stern, thinks that the move from loans to equity and, therefore, the greater commitment to improving the quality of the management of the business, rather than securing a return on the loan, will possibly have great creative impact. The reason for that move is not merely to obtain a higher rate of return that will make it attractive to commercial investment; it will improve the long-term management capacity of the company into which the equity is placed. That potential benefit of the change could have great importance.

Mr. Wells: I very much agree with that point. I want the CDC to be encouraged by the directors in actually pursuing that. However, the change will not be easy to achieve. The right people must be found; they must be properly trained and supervised. However, doing so will provide security and that vital interest in the day-to-day management and in taught management. That would make it impossible for Governments in the states in which the CDC was operating to make political appointments to the management—a problem that has faced the CDC in the past. Such political appointees were not able to manage properly; they had neither the training nor the background and were forced into the management of the company. Thereby hangs a serious tale, which, in the case of the Guyana Electricity Corporation, ended with the collapse of the company, so that, for some months, there was no light in Guyana's capital city. Management is most important and I hope that it will be developed systematically, using modern management techniques.
I come now to the question of borrowing. The CDC will be able to expand if it reaches the point at which it can borrow on the international markets. Until now, its great restriction has been that it was subject to the constraints of the public sector borrowing requirement and the amount that could be borrowed in the private sector. Once money from the aid budget was not being invested in the CDC, its ability to expand was dependent on borrowing from the Treasury. It will be released from that constraint by the Bill, once the shares are sold to the private sector. I understand that the Treasury rules provide that the Government should sell 60 per cent. of the shares to private sector investors and the CDC would then be able to borrow on the private markets. That goal must be reached as soon as is practical, because it is from that borrowing that the CDC will be able to expand.
My next point relates to timing. If we were to turn the CDC into a company under the Companies Act 1985, but wholly owned by the Government—as it would be


possible and practical to do by the end of this year—the CDC would be unable to borrow from the private sector because its shares would be wholly owned by the Government. In those circumstances, I worry as to whether the CDC could maintain its investment programme—roughly running at about £250 million a year—because its only source of money would be self-generated funds, unless the Department is considering allowing the CDC to borrow from the Treasury during that interim period. I suppose that that would be possible, but perhaps the Under-Secretary of State could let us know about that when he sums up. Will he also confirm whether some of the aid budget will be allocated to the CDC to enable it to expand its lending and investment programmes during the interim period before the shares are sold off and it can borrow in the private sector?
That period is crucial because the CDC will be attempting to build a track record during those years. If its ability to borrow and expand is constrained too much, there will a bad effect on the track record that it presents to private investors.
My own view is that the sooner we sell the shares and launch the CDC in its private-public sector role, the better, which brings me to the balance sheet. Waiting too long for a track record would be a mistake; the CDC should go quickly into the private sector, so that it can begin to borrow, to adjust to the disciplines of the private sector and to make the equity investments necessary to enable it to accomplish what the Secretary of State wants. Certain interim steps could be taken—for example, dressing up the balance sheet by issuing preference shares. Such shares would have a coupon of, say, 8 per cent. They would attract ethical investors and commercial investors from the insurance world who are interested in an emerging market portfolio. They would also have transfer rights, so that they could be transferred into proper, full equity share at a later date to be decided by the investor. In that way, we could attract private sector investment into the CDC sooner.
Whether the preference shareholding would qualify the CDC to borrow from the private sector is a detail that we need to explore, but that sort of imaginative thinking has to go into the balance sheet and how to dress that up in the interim period. There is no doubt that it would be perfectly possible to produce a balance sheet for the CDC that would be attractive to the private sector almost immediately, because the CDC has accumulated profits and surpluses within the budget totalling almost £550 million. In addition, there are Government loans that are not currently being repaid, or on which interest is not being paid, which could be converted into equity.
Those are major hurdles which the CDC must overcome as it transfers to its new role of investing in vibrant sectors of society. In its developmental role, it will help countries to escape dependency and enable them to achieve self-confident development. As those countries generate their own resources, they will be able to invest revenues derived from the taxation of those resources in housing, education and health, which are vital to proper development.
I shall conclude with a statement made by Sir Michael McWilliam to the Select Committee. I asked:
Can the CDC achieve its aims of development more effectively if this Bill goes through? What do the panel think, yes or no?

Sir Michael's conclusion was:
I think the end result as one comes out of this transition period will be more focused development, a clearer idea of where they really are making a contribution and the ability to attract partner funds will also be enhanced and that again will reinforce their development purpose. I think this whole process, uncomfortable as it may be and muddly as it may be in some respects, has a very worthwhile objective at the end of the road.
It is a worthwhile objective to find a way of enhancing, encompassing and bringing together private sector investment in the extremely poor and not-so-poor countries of the third world, so as to bring about economic development that complements social and other development.

Mr. Phil Hope: I shall be brief and stay within the time allowed to me.
I strongly support the Bill because it gives us an opportunity to pursue the White Paper's goals and objectives of eliminating world poverty. The hon. Member for South-West Devon (Mr. Streeter) said, revealingly, that the Conservatives did not privatise the CDC because it would hurt the poorest of the poor. What does that tell us about the Conservatives' motives in all their other privatisations?
I am convinced that the Bill is about long-term partnership, as the CDC attracts new private capital for investment in the public good in developing countries. The CDC will target and expand its work in the poorest countries and will ensure that its investment is ethical, with social, environmental and health and safety issues taken into account. I remind the House that, in October 1997, when launching the White Paper, my right hon. Friend the Prime Minister said of the sale of the CDC:
I can also promise that all the money Government raises from the sale will be ploughed back into our development programme".
That is an important point.
The White Paper's goal of halving the number of people living in extreme poverty by 2015 is extremely important. Achieving that goal is not just about aid, or trade, or development support; it is about investment. My right hon. Friend the Secretary of State made it clear that we have to get private sector investment into developing countries. The ambitious programme that the Government have set out will turn the CDC into a major instrument in the achievement of that goal, and I hope that this will become a model that all other countries will follow. In that way, developing countries will be able to go forward with us and achieve the elimination of global poverty.

Mr. Edward Leigh: One of the key reasons why I take an interest in this subject is that, when we were at the Department of Trade and Industry, Sir Tim Sainsbury and I were involved in the successful privatisation of the Export Credits Guarantee Department. That company is not entirely dissimilar from the CDC, even though, because we were dealing with potentially far more prosperous markets, we faced far fewer problems when the ECGD was privatised than the Government are facing today. The then Labour Opposition opposed that privatisation, but we rejoice when sinners repent of their former mistakes.
I have a few questions to ask the Government—after all, the CDC was founded in 1948 and it has been successful, so we have to be certain that the motives and factors prompting change are powerful. The CDC borrows long, at 25 years, and lends short, at an average of seven years; that adds to its surpluses. How will being in the private sector facilitate its ability to continue to do so? If the CDC's current borrowing power is insufficient, and if it will have more freedoms in the private sector, will it be able to borrow as cheaply in the private sector as it borrows now? Since 1995, the corporation has borrowed from the Exchequer at a zero rate of interest. Can that continue when the CDC is in the private sector?
Can the Treasury concede a special tax structure to a private company, to enable that new private company to compete with offshore companies? Will not that set a precedent, which the Treasury normally resists vigorously? The CDC is an extremely small burden on the UK taxpayer, so why are we changing its status now? If we are doing so because of its insufficient borrowing powers, could not those powers be extended in some other way—for example, by allowing the CDC to borrow overseas, which would free it from the shackles of the public sector borrowing requirement?
As I said in an earlier intervention, I understand that the CDC's reserves at 31 December 1997 stood at £486 million—some 39 per cent. of its capital employed. My concern is that the CDC will be a target for predators who are more interested in its reserves than in its work. The Secretary of State is completely committed to her subject and I do not for one moment question her good faith in this matter; I do, however, question the ability of the new company that she is creating to resist predators once it leaves her control.
That is all important, because 80 per cent. of the CDC's investments are in countries whose per capita income is less than $1,600. I have no doubt that the new CDC will continue to invest in those very poor countries, but, like my hon. Friend the Member for South-West Devon (Mr. Streeter), I am not convinced that, once it is in the private sector, it will not concentrate its investments in such countries in the better, more fruitful and more commercially viable investments that are already the subject of private sector interest.

Clare Short: That is a very important point. We do not want the CDC or its successor to make unprofitable, second-rate investments. High-return, high-tech investments are not taking place in the poorest countries, but they want and need that investment. If the CDC were to move into sectors with high rates of return and help to lever that kind of investment to some of the poorest countries in the world, that would be extremely beneficial to those countries' economies. It would not be a bad thing.

Mr. Leigh: The right hon. Lady is absolutely correct. However, my point follows on from the excellent speech made by my hon. Friend the Member for Hertford and Stortford (Mr. Wells). He brings great experience to this debate and gave a string of examples—which included hotels in Antigua—where the CDC, under its current structure, had led the way by investing in projects that were not initially attractive to the private sector. I have

no doubt that the right hon. Lady is correct: it is right and proper that the CDC should be able to make more profitable, high-tech investments. However, we are concerned that the private sector is already doing that. We are not convinced that, once freed from Government control, the new CDC will not forget its roots, which are so important to the developing world.
The CDC's return on capital employed fell from 8.3 per cent. in 1996 to 7.3 per cent. in 1997. How will private partners be attracted in such an atmosphere? The Government admitted that there was a problem in their evidence to the Select Committee when they said that returns at that level would "not be sufficient". Will socially desirable projects be sacrificed in order to increase returns? The Prime Minister said:
I am less interested in whether an institution is public or private than whether it works.
We all agree with that. However, what proof do we have that the CDC will work better as a public-private institution—apart from vague exhortations about the merits of the "third way"? Is this project a sacrifice to the ideology of the third way?
What proof do the Government have that the CDC could not continue its work in its current form? Could it not be allowed to borrow overseas? In any event, is this project not a privatisation in all but name? If it is, why not admit it? What is the point in obtaining a substantial minority shareholding? If the golden share is retained, is not the substantial minority shareholding of 25 per cent. superfluous? The Government will sell what the CDC owes it as shares, but will the new shareholders want to continue to invest in future projects of the type that we have described? Will they set new priorities?
I believe that the CDC as we know it and have come to admire it is being sacrificed on the altar of the third way. The third-way mantra is that the public and private sectors can inevitably run companies together. The Post Office will be the next victim of the third-way ideology—although that will be an even more timid toe in the water because the political complexities are far greater: in that instance, it will be our constituents complaining, not some of the poorest people in the world.
I have a different third way. I believe that there are several wrong approaches to international development. One wrong approach is to wash one's hands of it and say that people in the developing world are none of our concern. All hon. Members are passionately concerned about poor countries and want to help them. Another clearly wrong method is the woolly-headed, generous approach, unrelated to market disciplines, which has proved disastrous in many countries. 1 do believe in the third way: a hard-headed, market-disciplined approach. If the company achieves that, well and good; but why not at least have the courage to admit that this is a full-scale privatisation? If it is, I suspect that some of the poorest people in the world may suffer, and that we may have to create a new Commonwealth Development Corporation in the future.

Mrs. Cheryl Gillan: This has been an interesting and full debate about the Commonwealth Development Corporation, which has been operating since 1948. In a way, I suppose that we have been considering what it will do in the next


millennium. I join hon. Members on both sides of the House—not least my hon. Friend the Member for South-West Devon (Mr. Streeter), who opened so ably for the Opposition—in paying tribute to the corporation for the way in which it has discharged its aims and objectives since its inception.
We welcome this opportunity to examine the organisation's forward planning. I stress to the Secretary of State that the Opposition's motives are as good as her own: we have no vested interest in seeking the failure of any privatisation or public-private partnership—whatever the right hon. Lady wishes to call this measure. I hope that she will consider my remarks in that spirit. However, the process is not without its difficulties—not least of which is the U-turn that the Labour party has made on this issue.
The Opposition are supportive of the corporation's contribution. It is a public corporation and it will remain even more so under the next Labour Government."—[Official Report, 20 May 1996; Vol. 278, c. 65.]
Those are the words not of some left-wing fanatic but of the Under-Secretary.

The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): Who says that I am not a left-wing fanatic?

Mrs. Gillan: If the cap fits, wear it. The Under-Secretary is responsible for steering the Bill through the House, and perhaps the fact that his heart is not in it has contributed to the delay in the passage of this measure.
It has taken a remarkably long time to bring the Bill to the Floor of the House considering that it began its passage through the legislative process on 7 December last year when it received a Second Reading in another place. From its First Reading in this place on 10 March, it has taken two and a half months to reach this stage today—although that is not as long as the Foreign Secretary takes to answer some written questions. The hold-ups in the passage of the Bill are indicative of the problems attached to it.
Unfortunately, the Bill's passage has coincided with the CDC's announcement that it made a £42 million loss in 1998—its first annual deficit since 1954. That is hardly a helpful result considering the Government's plans for its future. The Bill has at last reached the House and we have had a chance to listen to hon. Members' views about the proposals and the so-called public-private partnership, which is privatisation by another name—as my hon. Friend the Member for New Forest, West (Mr. Swayne) pointed out in an intervention during the Secretary of State' s speech.
We know that the legislation gives rise to some difficulties. That is recognised not least by the Department, which has been wrestling with the problems highlighted in another place, in the Select Committee and in today's debate. The key is in the Secretary of State's speech. The Secretary of State was honest enough to say that she had struggled with this issue and that she believed that she had found the solution. I hope that she has—sadly, only time will tell—but it is only right that we should have an opportunity to raise with her our fears and trepidations and examine the problems that we believe the CDC may face as she takes it down this route. The

Secretary of State referred to tailored tax treatment. However, as many of my hon. Friends have pointed out, we have not had an opportunity to examine the details of that tailored tax treatment, which will not be available until the Committee stage.
The Secretary of State talked about the problems of the timing of the listing and the CDC's financial record. When I asked her about future profitability, she said that she was no Mystic Meg, but she went on to read from her script that the CDC's profitability will increase.

Clare Short: The hon. Lady claims to wish the CDC well, so she should not make irresponsible remarks. Everybody in the world knows that emerging markets have faced difficulties this year, and any responsible decision to float the CDC on the stock market will therefore take into account the state of emerging markets and the likely interest in investing in the company. The hon. Lady' s colleague the hon. Member for Hertford and Stortford (Mr. Wells) made constructive points about making sure that the balance sheet can perform well in the meantime.
There is a gap between making responsible criticism, and denouncing the whole operation and trying to score points that would reduce the possibility of the project having the most beneficial future. It is unnecessary to descend into cheap point scoring instead of tackling a complex and interesting transition.

Mrs. Gillan: That intervention does not do the Secretary of State justice; it is unworthy of her. She represents a party that talked down every privatisation carried out by Conservative Governments. Nothing in my remarks so far has been other than the truth, and I am trying to be constructive. I said at the beginning of my speech that I hoped that the Secretary of State would respond to that, but obviously that will not be the case.
There has been much praise of the CDC on both sides of the House. The hon. Member for Basildon (Angela Smith) said that she wanted the CDC's focus to remain on the poorest countries, and she wanted wider consultation with non-governmental organisations, which we can all applaud. However, the language that the hon. Lady used gave the impression that she believes that the Government will retain total control of the CDC. The hon. Member for Richmond Park (Dr. Tonge), in her rush to support the third way, almost forgot that she intended to be critical of the Bill. She seemed to welcome the Bill and then said that it would not work. She is trying to be all things to all people, but I agree with the scepticism that she expressed later in her contribution.
The hon. Member for Bristol, North-West (Dr. Naysmith) welcomed the draft Bill on freedom of information, and there are so many unknown quantities in this Bill that I tend to agree with him that we need more freedom of information, perhaps to know the details on which we are legislating today. If ever a Bill needed a pre-legislative process, it is this Bill, which contains so many unknown quantities that we shall not know what we are talking about until the Department for International Development chooses to reveal the details.
My hon. Friend the Member for Hertford and Stortford (Mr. Wells), the Chairman of the Select Committee on International Development—

Mr. Streeter: The distinguished Chairman.

Mrs. Gillan: Indeed, as my hon. Friend says, he is the distinguished Chairman of that Committee. My hon. Friend the Member for Hertford and Stortford, who has already made such a great contribution to the Bill's passage, acknowledged that the devil is in the detail, and went on to prove his command of the detail of the Bill. I hope that, in Committee, Ministers will prove that they have as much command of the detail as my hon. Friend does.
In a brief contribution, the hon. Member for Corby (Mr. Hope) said that he hoped that the Bill would be the model for all to follow. I hope so too, but unless questions are answered, that will not be the case.
My hon. Friend the Member for Gainsborough (Mr. Leigh) reflected Conservative Members' concerns about whether the new CDC will be a target for predators. I hope that the Under-Secretary will address that issue in his winding-up speech.
There is a problem with the Bill. Privatisation was very close to our hearts when we were in government, and if it had been possible, we would have moved towards privatising the CDC in the belief that we could have improved its lot in the world. We judged that it was not possible, and that has been reflected in the proceedings to date. When the Bill passed through the upper House, there was a feeling of consensus, but when one reads the debate, one realises that it was mainly due to the fact that the CDC commands such affection, and its work such respect. There was consensus about its contribution to the development of poorer countries, but there was disquiet about the incompleteness and inadequacy of the Government's plans. The same concerns have been expressed today.
When my hon. Friend the Member for South-West Devon opened for the Opposition, he said that we would not seek to divide the House on Second Reading. I agree with him, and we shall not seek a Division. Let me instead reiterate for the Minister the detailed matters that we hope to explore. My hon. Friend described four of those in his speech.
First, have the CDC's developmental principles been adequately protected, or will the Bill destroy its great heritage? That question has come from all sides in this debate. Will the Department's budget receive a fair price for our taxpayers' investment during the past 50 years? I hope that the Minister will answer that question. Will the privatisation protect the poorest people in the developing world? They are the very people whom the organisation was set up to help, and we do not want there to be any diminution in that help. Do the Government's proposals for the tax treatment of the new CDC deserve our support? I presume that the Minister will be able to say little about that tonight because we will have to wait until nearer the Committee stage for the detailed measures to emerge.
I hope that the Under-Secretary understands our deep-seated concerns. The process of reforming the CDC started in October 1997, and 19 months later, we are left with unanswered questions, unpublished documents and no direction or guidance on certain key aspects of the Bill. That has been reflected in debates in the other place and on the Floor of this House and in two reports by the Select Committee. I hope that the Minister will be able to answer some of our detailed questions tonight. If not, I hope that he will be able to give us the answers in Committee. We shall reserve until Third Reading our judgment on whether he has succeeded, and we may feel that we have to vote against the Bill because of the concerns articulated today which the Government have not yet addressed.
Like other hon. Members on all sides of the House, I wish the Bill well in the next stage of its proceedings, but I want the Minister to ensure that he responds to all our questions and concerns. The CDC deserves that.

The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): We have had a predominantly thoughtful debate on the policy and principles behind the Government's proposal to establish a public-private partnership for the CDC, which, as my hon. Friend the Member for Basildon (Angela Smith) said, was set up by a Labour Government in 1948.
There was an interesting contrast between the petty, carping, negative tones of the principal Opposition spokesmen and the constructive, helpful welcome for the Bill by the knowledgeable, thoughtful Chairman of the International Development Committee, the hon. Member for Hertford and Stortford (Mr. Wells). He has worked for the CDC, is familiar with its aims and knows what he is talking about, and is not merely a spokesman who is trying to climb the greasy pole of the shadow Cabinet.
The public-private partnership is at the very heart of the Government's development focus on working with others to eliminate poverty. As the hon. Member for Hertford and Stortford and other members of the Select Committee said last year in their report on the future of the CDC, the partnership is a
"challenging and unique opportunity for the best characteristics of the public and private sectors to be combined to make a significant contribution to poverty eradication".
After careful thought and consideration, that was the unanimous conclusion of a Select Committee that has Conservative members and a Conservative Chairman.
In today's debate, the proposals have been welcomed by Labour, Conservative and Liberal Democrat Back Benchers. It is only the Opposition spokesmen in this House who have criticised and questioned the Bill. When the Bill passed through the House of Lords, the Opposition's tone was completely different, perhaps because they have a little more knowledge about and understanding of development.
The hon. Member for South-West Devon (Mr. Streeter) praised the Secretary of State for the White Paper, the comprehensive spending review and everything that has been done. He should therefore understand that it is inconceivable that someone with that commitment and record would do anything to undermine the CDC's development role.
This is not a privatisation. Under public-private partnerships, there will not be windfall gains or fat cats, as we saw under Tory privatisations. That has been


assured through a combination of measures, such as the 25 per cent. shareholding, the golden share, the memorandum of understanding, the deed, the memorandum and articles of association and investment policy—[Interruption.] If, instead of gossiping among themselves, Conservative Members were to read such articles, they might be a little better advised and more informed.
The development of objectives will be entrenched in the public-private partnerships, as my right hon. Friend the Secretary of State has described. Private investors will not be able to walk away—as the hon. Member for South-West Devon said—from the objectives. Some may choose not to enter partnerships, but if they do so, they will know of the ethical investment policy to which the CDC must adhere. Investors will enter the partnership on that basis.
The hon. Member for South-West Devon said that we will create a huge development void in the poorest countries of sub-Saharan Africa and elsewhere. There is currently such a huge void in foreign investment. The purpose of these partnerships is to mobilise private capital for such countries and to demonstrate the attractiveness of investment in them. We shall be highlighting the attractiveness of the 70 per cent. of the poorest countries—not emerging markets, but pre-emerging markets, as the Chairman of the Select Committee rightly said.
The Opposition have suggested no alternative. The hon. Member for South-West Devon said that he intends to strengthen the Bill in Committee, but he has given no indication of how he will do so.
The hon. Member for South-West Devon also raised the question of tax treatment. Several hon. Members did so constructively, but the hon. Gentleman was negative and carped. I confirm to him and to others that, under the Government's extraordinary arrangements, a unique tax regime will be introduced for this public-private partnership, in which the private sector will have a majority shareholding. The tax amendments will exempt the partnership from United Kingdom corporation tax, arising, as the Chairman of the Select Committee said, from income and chargeable gains in its investment activities. The exemption will not extend to VAT, stamp duty, and so on. The proposal aims to create a level playing field, but nothing beyond that.

Mrs. Gillan: The Minister is obviously having a great deal of difficulty, as he blusters through a quite remarkable attack on my hon. Friend the Member for South–West Devon (Mr. Streeter). Does the Minister still believe to be true what he said in 1996, when he stated that the CDC
"is a public corporation and it will remain even more so under the next Labour Government"?—[Official Report, 20 May 1996; Vol. 278, c. 65.]
Has he not made a complete U-turn?

Mr. Foulkes: The hon. Lady was accusing me earlier of being a left-wing fanatic.

Clare Short: It is true.

Mr. Foulkes: I would not be in the Labour party if I were not left wing. The Labour party is a radical party.
In some ways, the hon. Member for Richmond Park (Dr. Tonge) was helpful; she welcomed the general proposals and rightly asked a number of specific questions, which can be discussed in Committee. Committee is the right place in which to discuss all such detail. The one thing that I did not appreciate was her misunderstanding in saying that the fact that full details of tax proposals were not yet available was an insult to the House. She is a relatively new Member. I have been in the House for 20 years, and have seen the introduction of major proposals not just in Committee but on Report. The unavailability of details is not really an insult to the House. We have been working on them and will table amendments on them in Committee, on which we shall have detailed discussion.

Dr. Tonge: Does the hon. Gentleman agree that the tax proposals are an integral and essential part of the Bill, without which it cannot be debated properly?

Mr. Foulkes: I have given an indication—my right hon. Friend the Secretary of State also did so—of the basis of the tax proposals. All that we have not done is provide what the hon. Member for South-West Devon described as "a piece of paper". We all know the value of some pieces of paper. We have given a clear indication of what has been agreed on the tax proposals. Detailed, technical amendments—that is all that we are talking about—to give effect to what my right hon. Friend the Secretary of State and I have said will be tabled in Committee. [Interruption.] Opposition Members can mutter as long as they like, but it will not alter the truth: we have given details of the exact tax proposals and said that amendments will be tabled in Committee.
The hon. Member for Hertford and Stortford asked some sensible questions—unlike his Front-Bench spokesman, the hon. Member for South-West Devon—on CDC finances. Some Opposition Members said that they would not want to wish this PPP ill, but then challenged and questioned CDC finances. No one underestimates the challenge that the CDC has been set to improve its financial returns while adhering both to its investment and ethical policies. My right hon. Friend the Secretary of State explained why CDC returns have been modest. She also described the 1998 results.
I can tell the House, and particularly the hon. Member for Chesham and Amersham (Mrs. Gillan), who has been asking about this matter, that the CDC—not the Government—expects a return to profitability in 1999. I hope that the hon. Lady will join me in hoping that that is so and encouraging the CDC in its efforts—[Interruption.] I am answering the debate. The hon. Lady asked a question, and she has her answer. She should be satisfied, instead of muttering away.
Several hon. Members asked about the CDC's financial relationship with the Government. The point about the period between the CDC becoming a public limited company and the assumption of private shareholdings is important. I refer hon. Members to the memorandum of understanding between the directors of the CDC and the Secretary of State, in which it says that the Secretary of State
will give careful consideration to requests for assistance or guarantees under sections 9… and 10 … assessing them against their impact on the value of the public sector's interest in CDC and on development and with regard to other claims on the funds available to her and all other relevant considerations".


For the period in question, arrangements will be exactly the same as they are at the moment.
This has been a useful debate. I welcome all the positive contributions to it, particularly from my hon. Friends, who are notably all fellow co-operators—people who believe in ethical investment and who understand it.

Mr. Wells: Will the Minister provide in Committee details of options available to the Government on dressing the balance sheet for sale?

Mr. Foulkes: I shall certainly look into that, and undertake—if it is possible—to do so.
We rejected the privatisation route. Instead, we are creating a public-private partnership, which gives us the best of both worlds: responsibility and enterprise, accountability and profitability. We also rejected the offshore route—the tax-haven route which the hon. Member for South-West Devon wanted. We have come up with a neat solution to give the CDC advantages, enabling it to compete on a level playing field without siting it offshore: again, the best of both worlds.
The public-private partnership will provide a double bonus for development. All the proceeds of the sale will be ploughed back into our development budget for further work in the poorest countries of the world, helping to eradicate poverty. That is one of the bonuses; the other is that the CDC will be able to mobilise further funds from the private sector for its development work. All hon. Members should welcome that, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

Orders of the Day — COMMONWEALTH DEVELOPMENT CORPORATION BILL [LORDS] [MONEY]

Queen's recommendation having been signified

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),

That, for the purposes of any Act resulting from the Commonwealth Development Corporation Bill [Lords], it is expedient to authorize—

(1) the issuing out of the National Loans Fund of sums required by the Secretary of State for making loans to the Commonwealth Development Corporation or a company associated with it;
(2) the charging on and issuing out of the Consolidated Fund of sums required by the Treasury for fulfilling any guarantee given for the discharge of financial obligations of the Corporation;
(3) the payment out of money provided by Parliament of—

(i) sums required by the Secretary of State for fulfilling any guarantee given for the discharge of financial obligations of companies associated with the Corporation;
(ii) sums required by the Secretary of State in connection with the acquisition of, or of rights to subscribe for, securities issued by the Corporation and companies associated with it;
(iii) any increase attributable to the Act in the administrative expenses of the Secretary of State or the Treasury;
(iv) any increase attributable to the Act in the sums payable out of money provided by Parliament under any other Act;
(4) the extinguishing of liabilities of the Corporation and of companies associated with it in respect of guarantees under the Act and advances and guarantees under the Commonwealth Development Corporation Act 1978;

(5) the payment of sums into the Consolidated Fund or the National Loans Fund.—[Mr. Pope.]

Question agreed to.

Orders of the Day — Modernisation of the House of Commons

[Relevant document: The Second Report from the Procedure Committee, Session 1998—99, on Procedural Consequences of Devolution: Second Interim Report (HC 376).]

Motion made, and Question proposed,

That this House approves the Second Report from the Select Committee on Modernisation of the House of Commons on Sittings of the House in Westminster Hall (House of Commons Paper No. 194).—[Mrs. Beckett.]

Mr. Deputy Speaker: Madam Speaker has selected the amendment tabled by the right hon. Member for Bromley and Chislehurst (Mr. Forth) and the hon. Member for Macclesfield (Mr. Winterton), at end add
`except for paragraphs 17 and 24, and considers that the new sittings should be known as the Commons Committee; that the Wednesday morning sitting devoted to private members' business should not be transferred to Westminster Hall; and that the seating plan to be adopted should be as set out in Appendix 2 of the Report.'.
I also understand that it will be for the convenience of the House if we debate motion No 4:
That in the next Session of Parliament the Standing Orders and practice of the House shall have effect subject to the modifications set out below:

(1) On days on which the House shall sit there shall be a sitting in Westminster Hall—

(a) on Tuesdays between ten o'clock and one o'clock;
(b) on Wednesdays between half-past nine o'clock and two o'clock; and
(c) on Thursdays beginning at half-past two o'clock and continuing for up to three hours (and in calculating that period no account shall be taken of any period during which the sitting may be suspended owing to a division being called in the House or a committee of the whole House).

(2) Any Member of the House may take part in a sitting in Westminster Hall.
(3) Subject to paragraph (12) below, the business taken at any sitting in Westminster Hall shall be such as the Chairman of Ways and Means shall appoint.
(4) The Chairman of Ways and Means or a Deputy Chairman shall take the chair in Westminster Hall as Deputy Speaker; and the House may appoint not more than four other members of the Chairmen's Panel to sit in Westminster Hall as Deputy Speaker.
(5) Any order made or resolution come to at a sitting in Westminster Hall (other than a resolution to adjourn) shall be reported to the House by the Deputy Speaker and shall be deemed to be an order or resolution of the House.
(6) If a motion be made by a Minister of the Crown that an order of the day be proceeded with at a sitting in Westminster Hall, the question thereon shall be put forthwith, but such motion may be made only with the leave of the House and may not be made on a Friday.
(7) The quorum at a sitting in Westminster Hall shall be three.
(8) If at a sitting in Westminster Hall the opinion of the Deputy Speaker as to the decision of a question (other than a question for adjournment) is challenged, that question shall not be decided, and the Deputy Speaker shall report to the House accordingly; and any such question shall be put forthwith upon a motion being made in the House.
(9) If any business other than a motion for adjournment is under consideration at a sitting in Westminster Hall, and not fewer than six Members rise in their places and signify their objection to further proceeding, that business shall not be further proceeded with in

Westminster Hall, and the Deputy Speaker shall report to the House accordingly, and any order under paragraph (6) above relating thereto shall be discharged.
(10) At the end of each sitting in Westminster Hall, unless a question for adjournment has previously been agreed to, the Deputy Speaker shall adjourn the sitting without putting any question; and proceedings on any business which has been entered upon but not disposed of shall lapse.
(11) The provisions of Standing Orders No. 29 (Powers of chair to propose question), No. 36 (Closure of debate), No. 37 (Majority for closure or proposal of question), No. 38 (Procedure on divisions), No. 39 (Voting), No. 40 (Division unnecessarily claimed), No. 41 (Quorum), No. 43 (Disorderly conduct), No. 44 (Order in debate), No. 45 (Members suspended, &c. to withdraw from precincts), No. 45A (Suspension of salary of Members suspended) and No. 163 (Motions to sit in private) shall not apply to sittings in Westminster Hall.
(12) The House shall meet on Wednesdays at half-past two o'clock, and paragraphs (1) and (2) of Standing Order No. 9 (Sittings of the House) shall have effect on Wednesdays; and Standing Order No. 10 (Wednesday sittings), so far as it relates to business taken before two o'clock, shall apply only to sitting in Westminster Hall, and shall have effect as if paragraph (3) were omitted.

Madam Speaker has selected the following amendments tabled by the right hon. Member for Bromley and Chislehurst: the first to paragraph (7), leave out `three' and insert 'six': the second to paragraph (9), second line, leave out 'six' and insert 'three'.

The President of the Council and Leader of the House of Commons (Mrs. Margaret Beckett): I speak as Chairman of the Modernisation Committee.
I should like to make three things clear at the outset. First, this is not a Government proposal, although I personally support it. It stems from the Modernisation Committee's own research into a novel procedure used in Australia, and from the Committee's ideas on how that procedure could be adapted for use in the House of Commons. I believe that its originator here was the right hon. Member for East Devon (Sir P. Emery)—who, as hon. Members will have recognised, is not a Labour Member.
I know that the Modernisation Committee is very grateful to those—especially the Clerk of the Australian Parliament—who were good enough to come here and give evidence to us.

Mr. Andrew Robathan: Will the right hon. Lady give way?

Mrs. Beckett: I should like to make a little more progress.
Secondly, the motion gives the House the opportunity to conduct an experiment. The experiment, involving sittings in the Grand Committee Room off Westminster Hall, would give private Members more time—let me repeat that, because, inexplicably, some members of the press have got hold of the wrong end of the stick—more time to debate some of the many issues that, while undoubtedly worthy, are unlikely ever to find space in the crowded schedule of the Chamber. It could also allow time for more focused debates on, say, foreign affairs, or discussion of more Select Committee reports. Some 180 Select Committee reports are published each year, but time cannot be found for debate of more than about 12 a


year on the Floor of the House. What is being proposed is an addition to, rather than a substitute for, what we can do now.

Mr. David Maclean: I have listened carefully to what the right hon. Lady has said about the impossibility of finding time to debate those matters on the Floor of the House. However, I am conscious that, in the past year, we have had the longest summer holiday in history, the longest Christmas holiday in history and an extra four days' Easter holiday; moreover, I think that we are about to have the longest Whitsun holiday in our history. If we had shorter holidays than we have been used to having, would we not have time to debate these matters?

Mrs. Beckett: I do not have the figures with me, but, according to my recollection, most of the figures that the right hon. Gentleman has just given are incorrect. The summer holidays and the Christmas holidays were not the longest, and the Whitsun holiday will not be the longest either. The right hon. Gentleman may go on holiday when the House rises, but most hon. Members devote time to their constituencies, or indeed to other work. I am afraid that I reject what the right hon. Gentleman has said, and it is clear to me that the House does as well.

Mr. Edward Leigh: Does the right hon. Lady agree that our problem is caused less by the fact that we have not enough time than by the fact that the time we have is so badly used? In some debates, such as those on Kosovo, it is virtually impossible to be called, while at other times the Whips are running around desperately trying to get any hon. Members to speak on subjects about which they know hardly anything. Would it not be better to allow debates in the Chamber to come to a natural end—if necessary, by arranging votes at fixed times, rather than providing for them to begin at the end of the debates preceding them?

Mrs. Beckett: A number of suggestions have been advanced about how we could use our time better. No doubt, some will be aired in this debate. However, it is my understanding that the House of Commons sits for rather longer hours than most other legislatures.

Mrs. Gwyneth Dunwoody: Can we now dispense with the fiction that we are sitting for shorter hours? In fact, so much business is being jammed into sittings on Mondays, Tuesdays, and Wednesdays that Members are being removed from Select Committees and other Committees. We are told that there is not enough time, but in fact the timetable is being skewed.

Mrs. Beckett: I do not entirely share my hon. Friend's view on this occasion. I feel that there is a degree of exaggeration about the extent to which the changes in the pattern of sittings of the House are affecting other pressures on the House's time. However, although I fear I cannot share my hon. Friend's view entirely, it is a legitimate view, to which no doubt she may return.

Mr. Robert Sheldon: My right hon. Friend said that the sittings in Westminster Hall

would be an experiment. Some of us are quite relaxed about that, provided that the sittings will clearly be an experiment; but, if substantial sums are involved in the moving of furniture, there may be pressure to continue them. Will my right hon. Friend assure me that the sittings really will be an experiment, and that we can view the matter rather more objectively?

Mrs. Beckett: That brings me to the point that I was about to make. I assure my right hon. Friend categorically that what is proposed is an experiment—and, indeed, an experiment that will need to be reviewed, so that we can see whether, if it is approved, changes need to be made.

Mr. Robathan: Will the right hon. Lady give way?

Mrs. Beckett: May I answer my right hon. Friend's question first?
My third point is that the experiment will not require the House to make substantial or additional financial outlay. Work already scheduled for the Grand Committee Room will be brought forward, and the Committee and the House of Commons Commission have asked the House authorities to make every effort to find offsetting savings and to reprioritise within proposed works. The Committee took evidence about those matters from the Clerk of the House and from the Serjeant at Arms. I much regret—as, I think, does the whole Committee—that we did not formally involve the Accommodation and Works Committee and the Administration Committee, and I assure members of both Committees that no discourtesy was intended. The Modernisation Committee was, however, very mindful, following evidence from Officers of the House that the time scale for a decision to facilitate an experiment in the autumn was short. The House having been alerted to discussion of the proposals in the debate on our last report held before Christmas, it was felt that the matter should be put to the House for decision as quickly as possible.

Sir Sydney Chapman: The right hon. Lady will know that, as Chairman of the Accommodation and Works Committee, I had cause to write to her expressing disappointment that we had not been consulted earlier. Let me take this opportunity to thank her for what I can only describe as a very gracious reply.

Mrs. Beckett: I am grateful to the hon. Gentleman. The hon. Member for Broxbourne (Mrs. Roe), who chairs the Administration Committee, also wrote to me, and I have replied to her. She notified me that she would not be able to be present this evening.

Mr. Robathan: I apologise for intervening so early, but I particularly wanted to comment on the right hon. Lady's first point.
I have read the report, and I think there is much good sense in it, although I do not support it in general. Can we clarify the ground rules for the debate? The right hon. Lady's first point was that this was not a Government report, and I accept that; but will she say categorically that there will not therefore be a payroll vote?

Mrs. Beckett: Quite categorically, it is a matter for the House. It is a free vote and it is for the House to decide whether it wishes to undertake the experiment.
The Modernisation Committee identified a number of possible time slots for the sittings, but proposes three for the purpose of the experiment. The times are chosen to avoid a clash with questions and statements in the Chamber. Indeed, two of the proposed sittings would take place when the House was not sitting. The proposal is that two of the sittings should be for private Members' debates that are taken on the Adjournment, and the third for other House business, such as I have described.
The demand for such debates far outstrips what the House can accommodate at present. Applications for the daily half-hour, end-of-business Adjournment exceed the number of opportunities by five to one. For the longer Wednesday debates, applications exceed the opportunities by 10 to one.
The proposed Tuesday morning sitting, from 10 am to 1 pm, would follow the very popular Wednesday precedent of one 90-minute and three 30-minute private Member's debates on the Adjournment. Wednesday morning Adjournment debates would move—as was suggested to the Modernisation Committee in evidence—to Westminster Hall, and would last for the same time as now: from 9.30 until 2, making the Chamber available to visitors.
The Thursday afternoon sitting—of three hours starting at 2.30—would be available for a general debate, say, on a recent Green Paper, or a specific foreign country. About half those sittings could be used for extra Select Committee reports chosen by the Liaison Committee.

Ms Hazel Blears: With the advent of regional development agencies and the regional assemblies, clearly, regional business will become increasingly important to the House. In the north-west, we recently had two excellent debates on regeneration and on north-west transport. Can my right hon. Friend confirm that such regional issues, which are important to many of our constituents, will find a place in Westminster Hall debates?

Mrs. Beckett: It would be a matter for the House. I sympathise with my hon. Friend's wish for such issues to be aired. I have some other thoughts on how best that might be done and would rather—again, it is a personal view—that the Committee be used for issues that have a particular regional focus, but may transcend one individual region: for example, concerns about a main rail line. However, I entirely share her view that it is an extra resource available to the House to air issues that it is not now easy to find time to air.

Dr. Stephen Ladyman: My right hon. Friend has already said that it is an experiment, but can she assure me that, when it is reviewed, we will consider not just whether to continue with the Westminster Hall Committee, but whether to extend the range of business that might be taken in it?

Mrs. Beckett: We are getting somewhat into the realms of the hypothetical. If the House decided to conduct such an experiment and it proved to be a success, there might be pressure from Members to expand the procedure in the way in which my hon. Friend mentions, but we are by no means at that point at present.
The sittings would be chaired by the Chairman of Ways and Means and his deputies, or by senior members of the Committee of Chairmen. They would be open to any

Member to attend. As with a similar body in Australia, only non-controversial business would be taken and only with the agreement of the House. The Committee hopes that the sittings might be of particular interest to a wider and more specialised group of media commentators: for example, technical or subject-oriented journals or correspondents.
The Committee was conscious of the concern that is bound to be felt in some quarters—which may be expressed in the debate—that the sittings might detract from the Chamber itself, but believed, after much thought and discussion, that the potential advantages of such an additional forum outweighed those dangers—and might, indeed, ease the frustration of those many Members whom the Chair cannot call to contribute to debates in this Chamber with the frequency that they would wish.
If the report is approved, the experiment proposed will commence with the new Session in the autumn. Along with the development of pre-legislative scrutiny, it is perhaps the most fundamental of the changes that the Modernisation Committee has yet put before the House. It would increase opportunity for scrutiny of public affairs, and Parliament's capacity to hold the Executive to account.
Some calculation has been made of the increased opportunities that the experiment might provide for the House. Before we have any more remarks about sitting for an extra half an hour here and there, or giving up a day of what is described as a holiday, let me draw to the attention of the House the potential increase in debate time.
The proposal would provide for some 140 extra Back-Bench Adjournment debates a year on Tuesday mornings; that is four a week for some 35 weeks. It would enable up to three dozen extra Select Committee reports to be debated on Thursday afternoons. It would allow for some 17 or 18 extra general debates on subjects for which the House cannot find time.
In total, we are talking about nearly 200 extra debates a year. Hon. Members on both sides of the House frequently call for the opportunity of increased scrutiny. That is what the proposal, coming from an all-party Committee, provides. I hope that the House will give it a fair wind.

Sir George Young: The motion is certainly an issue on which Conservative Members have a free vote. It is a House of Commons matter, on which there will be a wide variety of views. On balance, I will support the proposition that is before us, but I will be neither dismayed nor surprised if some of my right hon. and hon. Friends come to a different view.
I begin with two general points. First, I am not an uncritical supporter of the recommendations of the Select Committee on Modernisation. I objected to the previous recommendations on Thursday sittings—to which the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) referred—with their compression of the working week at Westminster. They emanated not from the Committee, but from the Government, and have made it more difficult for us to hold them to account. Of course, I understand that it may be popular with some Members of Parliament, but that does not make it right for the Commons. I look forward to returning to that issue when the evaluation of the experiment is carried out and completed.
Secondly, as the Leader of the House said, we are being asked tonight to decide not whether the Westminster Hall Committee is the right way forward, but whether to proceed with the trial and, in the light of that, whether it is a sensible reform for the House.
Initially, I was suspicious of the proposals for a Main Committee, as it was called at the time, because of the centrifugal impact it might have on the Chamber. I will explain why those fears are not soundly based, but, as we took evidence from those who have tried a similar solution and as we analysed the strategic problems that confront Parliament as a whole, I was persuaded that we should give the proposal a go. It offers the opportunity better to hold the Executive to account. That is possibly the biggest challenge that Parliament faces at the moment.
One can divide proposals for reform of the House into two main groups: first, those that facilitate or expedite the legislative process—Special Standing Committees, carry-over motions and guillotines; secondly, those, such as Opposition days, which facilitate the "holding to account" process. There is an element of overlap in some reforms, but that distinction is helpful. The House has focused too much recently on the first type of reform.
The way that the proposal for the Westminster Hall Committee is structured is to focus on the second objective and to give the House a greater ability to hold the Executive to account, rather than to enable the Executive to push through more inadequately considered legislation. Paragraph 33 of the report makes that clear. Business can be referred to the Westminster Hall Committee only by agreement. If any orders of the day are referred to the Westminster Hall Committee, one objection can block the reference, as is explained in paragraph 41.
The type of business to be referred to the Westminster Hall Committee is essentially for holding the Government to account, principally by giving Back Benchers more time. If one wanted one paragraph that encapsulated the flavour of the report, it would be paragraph 23, which gives the impact very well.
The House is simply unable to patrol all the frontier between it and the Executive. The Westminster Hall Committee will give us opportunity to do that better, with more of the general debates that are held on Wednesday mornings, more Adjournment-type debates, and more debates on Select Committee reports.
It is worth quoting from the evidence of the Chairman of Ways and Means, on page 4 of the minutes of evidence, who said:
"However, there is, I believe a prima facie case for a carefully prepared experiment".
He goes on to deal with the balance that he believes that we should have.
The Westminster Hall Committee will be part of tilting back the terms of trade, which have swung too much the other way—a process that has accelerated under the current Government, who have consistently bypassed and undermined the House of Commons. Indeed, one has only to consider the events of last Wednesday—on the U-turn on trial by jury, and the Speaker's rebuke that went with it—for evidence of that proposition. Today, there was further evidence of it with the news that the Secretary of State for Trade and Industry planned a statement outside the House on sub-post offices, earning yet another rebuke.
The Westminster Hall Committee will not put things right on its own, but I think that—if read in conjunction with paragraphs 60 to 62, which are at the end of the report, but vital to it—it may be part of a solution. There is a need to look again at the Chamber in the light of the recommendation and the work of the Procedure Committee on the consequences of devolution.

Mr. Dale Campbell–Savours: The right hon. Gentleman will know that the proposed Committee will be an experiment. I wonder what action he intends to take—or whether he intends to offer advice to some of his hon. Friends, such as "Awkward Eric"—if Conservative Members were to decide simply to object, thereby preventing the entire arrangement from having an experimental period?

Sir George Young: If the hon. Gentleman looks at paragraphs 23 to 26, he will see that some references may be made without the matter coming to the House as a whole. I am quite sure that my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) needs no lessons from Labour Members on how to use the procedures of the House. However, paragraph 41 makes it quite clear that one objection will be sufficient to block certain references to the Westminster Hall Committee. The hon. Gentleman makes a valid point, and I am sure that Opposition Members will already have noticed it.
It is significant that, without dissent, the Select Committee accepted the proposition, in paragraphs 60 to 62, that the terms of trade between Government and the House should be shifted back to the House. That brings me to the argument about the impact of the proposed reform on the Chamber, which featured both in the evidence and in our discussions. Of course I understand the anxieties about that impact.
I regard the proposal before us as an evolution of other reforms, such as the introduction of Standing Committees after the second world war, and the expansion of Select Committees after the 1979 general election. Before those developments, the work was done either not at all, or on the Floor of the House. The House recognised that, if it were to do its job effectively, it would need forums other than the Chamber from which to operate. The same arguments that can be made against Westminster Hall were, doubtless, made against Standing Committees and Select Committees—that they would divert hon. Members from the Chamber, and thereby devalue the Chamber.
On both occasions, however, the House decided that its primary task was the holding of Government to account and the proper scrutiny of legislation. The House decided on those two reforms, ensuring that, so far as possible, the new Committees did not always sit at the same time as the Chamber—as we have sought to do with our proposal of avoiding sitting during Question Time and statements.
I know of no one who now wants to reverse the introduction of Select Committee or Standing Committees. The debate has moved on, to how we can make them more effective. Those forums are able to cause Ministers as much discomfort as the Chamber, as the report on Sierra Leone, to mention only one example, has shown.

Mr. David Davis: I am glad to hear my right hon. Friend mention the importance


of Select Committees, which—certainly in the past couple of years—have been one of the better mechanisms in holding the Government to account. However, a Select Committee's primary weapon is publicity and embarrassment, by airing the facts of real events. One of the most important mechanisms in performing that task is bringing Select Committee reports to the Chamber on Wednesday mornings.
My right hon. Friend says that the Committee will be an experiment. How will he measure the effectiveness of that experiment? Specifically, will he compare the effectiveness of a chamber at the other end of this building in debating problems aired in Select Committees reports—

Mr. Deputy Speaker: Order. Interventions must be brief.

Sir George Young: My right hon. Friend has raised the key issue of how we shall monitor the experiment's effectiveness. Although it is difficult to say in advance whether the experiment will be a success, I tell him that the publicity that Select Committees receive is derived not from the location of their sitting, but from the nature and persistence of their questioning and, quite often, the Minister's inability to respond to it.

Mrs. Dunwoody: Will the right hon. Gentleman give way?

Sir George Young: I should like first to finish the point, which may address one of the concerns of my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis).
If such an exchange were to take place in the Westminster Hall Committee, I believe that it would receive every bit as much publicity as some of the exchanges that we have had in Select Committee. The important matter is not so much a Committee's location as the nature of its questioning and the effectiveness of the ministerial reply to that questioning. If such an exchange takes place in the Westminster Hall Committee, I believe that it will receive every bit as much coverage as if it occurred anywhere else in the building.

Mrs. Dunwoody: I should be interested to know on what the right hon. Gentleman bases that assumption. As the reporting of Parliament is consistently going down—including the reporting of this Chamber—why does he think that, if the press is not reporting one Chamber, it will effectively report two?

Sir George Young: I was making the point that devaluation of the Chamber was caused not by introduction of Select Committees or Standing Committees, but by other, extraneous factors for which Labour Members bear much responsibility.
It is certainly not the case that introduction of Select Committees after the 1979 general election led to any devaluation of the Chamber's reputation. I regard the establishment of the Westminster Hall Committee in the same way as I regard the establishment of Standing Committees and Select Committees: as other forums in which Ministers may be held to account. I do not believe

that either Standing Committees or Select Committees led to undermining of the Chamber's reputation—that was due to other causes.

Mr. Peter L. Pike: Is it not important to remember that, if the report is approved, and as it very clearly states, Select Committee reports that are debated in the Chamber of the House will continue to be debated there, not on Wednesdays, but at a different time? The additional venue will also allow for debate on 36 Select Committee reports that are not debated.

Sir George Young: The hon. Gentleman is right to say that we are proposing additional time for Select Committees reports.
I was making the point that Standing Committees and Select Committees are excellent institutions, but that they are constrained both by membership and by subject. They are not as flexible as the proposed Westminster Hall Committee—which all hon. Members will be able to attend, and which may deal with any subject.

Mr. Andrew F. Bennett: Will the right hon. Gentleman give way?

Sir George Young: I shall give way—perhaps for the last time, as we are constrained and other hon. Members may wish to speak.

Mr. Bennett: When the right hon. Gentleman pays tribute to the Select Committee system, is he confident that the proposals will not undermine that system? What will be the priorities? Will a Minister be required to reply to an Adjournment debate or to attend a Select Committee? Often, Select Committees are pursuing with a Minister a particular line of interest, and attendances are fixed several weeks in advance. Adjournment debates tend to be fixed at much shorter notice.

Sir George Young: It is not unusual for one Department to be confronted with demands on the time of more than one Minister to attend Standing Committees and Select Committees. Adjournment debates will continue to be held at the end of the day in this Chamber, whereas the Westminster Hall Committee will be meeting earlier in the day, in Westminster Hall. Therefore, there will be no conflict of the specific nature described by the hon. Gentleman.

Mr. Nicholas Winterton: Will my right hon. Friend give way?

Sir George Young: I shall, out of respect for my hon. Friend—but this must be the last time.

Mr. Winterton: I am grateful to my right hon. Friend for giving way to an Opposition Member. He has stressed the importance of Select Committees. If Select Committees are so important—I believe that they are—and their reports are very helpful to the House, does he accept that Government, Opposition and the usual channels should respect the integrity of Select Committees and not seek to undermine them?

Sir George Young: My hon. Friend takes me way beyond my negotiating remit by referring to how Select


Committees are handled. When I was a Secretary of State and was regularly interrogated, my Government paid special attention to Select Committee reports. Every Minister would be wise to do so. One or two have tried to ignore the findings of Select Committees in this Parliament and have come unstuck.
The decline of the Chamber is not primarily due to the establishment of rival forums in the Houses of Parliament in which matters are debated. The reasons are deeper and the Government have much to answer for. If I am right to say that the establishment of Standing and Select Committees was not responsible for the decline in influence, the establishment of a Westminster Hall Committee need not injure the Chamber either. On the contrary, like the Select and Standing Committees, it might enable Parliament to do its job better.
I was keen that paragraph 55 of the report should specify that the experiment would not increase planned expenditure on the House this year. The House should observe the same discipline that it imposes on other public bodies. I was reassured to hear what the Leader of the House said about expenditure. I understand the sensitivities of members of the Accommodation and Works Committee. In retrospect, I think that we should have contacted them earlier in our deliberations.
To sum up my views, I think that it is worth giving this a go. It has the potential to enable us to do our job more effectively, but it should not be seen as a total solution. That will come only with an Administration committed to restoring the influence of the House in the nation's affairs. This is not such an Administration.

Mrs. Gwyneth Dunwoody: As we are debating a report to the House and to Members of all parties, I feel free to say whatever I wish, not least because, although I am fond of Mr. Ian Harris, the Clerk to the Australian Parliament, who gave evidence to the Committee, I know that for all his gentle tone he is a great persuader. I have debated with him whether the establishment of a separate Committee will enhance the work of the Chamber or detract from it. I was not persuaded by him, so I am hardly likely to be persuaded by the report.
The House is effective not only when it asks hard questions, but when it is able to debate with the people who are responsible for the legislative decisions that they are putting forward. We suffer from under-reporting in the press. The situation has changed a great deal since I entered the House. In those days, a Back-Bench speech made as late as 8 o'clock at night would be at least partly reported. That is no longer the case. There are many talented and brilliant sketch writers, but the reporting of the factual debate of the Chamber is going down and down. With the honourable exception of The Independent, which endeavours to maintain a parliamentary page, most national papers treat the House of Commons as if it did not exist.

Mr. Desmond Swayne: Does the hon. Lady accept that, as a consequence of the powers that the House has given to Ministers in enabling legislation and given to Brussels through the treaties to

which we have acquiesced, what we say here is of little importance, so it is hardly remarkable that it is not reported?

Mrs. Dunwoody: That is a great load of nonsense. A previous Prime Minister—the first woman Prime Minister—chose rarely to call her Cabinet together except when she wanted something written on the back of an envelope and frequently underplayed the role of the House of Commons. This is not new.

Helen Jackson: This is a relevant intervention. Does my hon. Friend accept that one of the potential benefits of the proposal for sittings of the whole House in Westminster Hall is that it might give good opportunities for the specialist media that do not belong to the Lobby here?

Mrs. Dunwoody: That is a load of nonsense. The specialist media are given Select Committee reports ahead of publication. They have direct contact with many of the specialist Committees. It is not the specialist press or the regional press who fail to report what we say. It is the general media, the broadcasters and the national newspapers. Unless we understand that, we shall not be able to carry this debate further.
I am worried that, whether we like it or not, the mere mention of the word "modernisation" makes some Members of Parliament leap up and down and say "What a brilliant idea." The result is that ever more work is pushed into three days of the week. Members of Parliament now expect not to be here on a Friday. That was not so in the past. Members usually reserved Fridays for their constituencies, but if there was major legislation they would be here and they would expect to vote. That is the other major difference. The rearrangement of the hours of Parliament—indeed, the lengthening of the hours of Parliament—has taken from Back Benchers the right to call a vote. That has not been fully acknowledged in the reports or by some of those who are debating the new proposals.
Select Committee reports gain status from being debated here. They are not a specialist interest to be tucked away in some nice little place where they will not give us any inconvenience. They are one of the driving forces that make Ministers answer questions. I am not surprised that both Front Benches agree on the issue. Some of my hon. Friends fail to understand that when there is agreement between both Front Benches on political developments, Back Benchers should ask why. One reason is that such developments frequently take from Back Benchers the right to debate awkward questions.

Mrs. Beckett: I bow to no one in my respect for the Select Committees and their Chairmen, including redoubtable Members such as my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), but it is far from clear to me how, given that only a limited number of Select Committee reports are debated at present, the offer of debates for a further 30 reports that would not otherwise be debated can diminish the power of Select Committees.

Mrs. Dunwoody: Then let me explain. I may not be clever, but it seems to me that reporting debates on


12 reports that take place in the Chamber is better than not reporting debates on 30 reports somewhere else. That is a real possibility.

Mrs. Beckett: I assure my hon. Friend that the proposal would not have gone through the Modernisation Committee had the members of the Committee thought that it meant that the Select Committee reports that are currently taken in the Chamber would no longer be taken here. The hon. Member for Macclesfield (Mr. Winterton) for a start would never have gone along for a second with such a proposition.

Mrs. Dunwoody: I am delighted to hear that, but I have been here long enough to see changes that are presented as temporary experiments slide into being rather more permanent than one would expect.

Mr. Mike Gapes: Will my hon. Friend give way?

Mrs. Dunwoody: I am so glad to have so much assistance in my speech.

Mr. Gapes: In the last Parliament, the Foreign Affairs Committee produced a large number of reports. I remember a report on Britain's relations with Hong Kong and China that was of great topical interest. We had to wait more than a year for a slot to debate it in the Chamber. If there had been another opportunity, we could have debated the report—which would have been embarrassing to the Government in some respects—earlier, influencing the debate sooner.

Mrs. Dunwoody: I look forward to the arrival of nirvana. If at the end of the experiment my hon. Friend has to tell me, "It is extraordinary. We got the debate, but somehow nobody knew what we were talking about", I shall refrain from saying, "I told you so."
It is nonsense to keep talking about the arrangement of the furniture as part of the problems of the House of Commons. When I was in opposition and had responsibility for health matters, I went to speak in the constituency of a very important lady who was full of the idea that we should not speak to the assembled crowds from a dais. We took our chairs and tables down to the floor of a large church hall, and the meeting proceeded. After 15 minutes, a voice came from the rear of the hall, saying, "I can't hear a word you're saying"—after which we took our chairs back to the stage, from where we were heard clearly.
I hope that we are not suggesting that arranging everyone in a hemicycle—the fashionable thing to propose—will change our confrontational politics. We confront one another in the House because we have differing views—that may come as a shock to some. Consensus is possible only when people agree on what they are talking about, and does not depend on where they are sitting. I sat next to a delightful gentleman from Luxembourg—who was supposedly of the same political view as myself—for many years and, apart from the fact that he shook my hand every time I got up to go to the loo, which was mildly embarrassing, we never came any closer because we were sitting in physical proximity. That may come as a considerable surprise to everybody.
If we are carrying out an experiment, I do not see why the cost should be so great. If we stuck with the existing arrangement, we might not be fashionable and we might not be in the vanguard of change, but we might exercise a degree of common sense which I find sadly lacking in the report.

Sir Peter Emery: The Leader of the House, with her usual perspicacity and charm, tried to pass to me the credit for the paternity of the report. I must make it clear that my only suggestion in the Committee was that we needed to find more time to debate the reports of Select Committees. We have moved a long way from that.
Since I came to the House in 1959, we have never had enough time on the Floor of the House to debate the number of matters that hon. Members have demanded week in, week out that we debate. The present Leader of the House does quite well in passing on requests. When he was the Leader of the House, Rab Butler had an absolute formula for dismissing requests—he said, "Not this week." The demand for more debates on the Floor of the House was nearly as great then as it is now.
The important question is this—will the experiment allow Members of Parliament to debate more matters than can currently be debated on the Floor of the House? If that can be done sensibly and reasonably, there is something to be said for it.
Paragraph 60 of the report ought to be highlighted. It says:
"We share the concern expressed to us by many Members about the diminution of the importance of this Chamber in our national life."
If the experiment lowers the standing of the Floor of the House in terms of the life of the nation, it will be a failure. However, I believe that the experiment may well enhance the standing of the House.
On a number of occasions, we have needed longer periods to debate major foreign affairs and defence matters, including Kosovo. We have not had time to debate these major factors in the life of the nation on the Floor of the House. If we can provide more time through the use of the Westminster Hall Committee, it will be to the benefit of us all.
Let us make certain that we do not follow the approach of the present Prime Minister. I am worried that he wishes to downgrade the House of Commons. He is seldom here, and he plays up to the presidential aspects of his job. If we follow his approach, the experiment will fail.
The Westminster Hall Committee can, perhaps, begin to debate Select Committee reports, although I must tell the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) that the report states that we must not decrease the number of Select Committee reports that are debated on the Floor of the House. As the choice of the debates will rest with the Liaison Committee, we must charge the Committee to ensure that that does not happen.
The newer hon. Members will not know what a private Member's motion was. We used to have a ballot, and there were 10 days in which a Member could select a motion of his choice, put it on the Order Paper and move it on the Floor of the House. That has gone, and that is a


great pity. It was one of the few powers that Back-Bench Members had to raise an important matter on the Floor of the House.
When I came to the House, there were 100 to 120 early-day motions a year, and we debated five, six or even 10 of them. When was an early-day motion debated on the Floor of the House in the past 10 years?

Mr. Maclean: As so many early-day motions are now dross and deal with inconsequential things, their status has been diluted by trivial matters. We might have some early-day motions debated if colleagues could limit them to 100 per annum.

Sir Peter Emery: I agree absolutely with my right hon. Friend. Tabling an early-day motion when Fulham win the championship, for example—or on something with an equal lack of importance—is nonsense. That is not a matter for a resolution of the House. However, some of the 1,500 early-day motions that are tabled are of importance and would be worthy of debate. If those could be debated in the Westminster Hall Committee, that would not be a bad thing. It would allow Members to express views that they are unable to express on the Floor of the House at this time.
When the main recommendation was passed, I happened to be in hospital. I would not have agreed to the introduction of a hemicycle, as I believe the Committee should reflect our parliamentary Chamber. I am glad to see that if the hemicycle does not work, we can return to the original structure.
I understand the genuine worry of hon. Members about the downgrading of the Chamber. If that is an effect of the experiment, it must cease. However, if the proposal does not downgrade the Chamber, and if it provides an opportunity for more people to speak and many more issues to be debated in a parliamentary manner, it will be worthy of an experiment.
Let it be understood that we will have to make a judgment on the Floor of the House on whether the experiment has succeeded. It must not be allowed to slip on and on and become part of the furniture, as so many experiments have done. We must set a date—perhaps in July, 14 months from now—for the matter to come back to the House so that we can consider the experiment in full and judge whether it has succeeded. On that understanding, the House would be wise to let it run for that period.

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Dr. Phyllis Starkey: I am enthusiastically in favour of the report. It is important to consider it in the context of the other reports already published by the Modernisation Committee and of the Committee's overall agenda, which has been to try to improve the effectiveness of the House of Commons and of individual Members of Parliament.
The public expectation of the range of activities that we should do—and especially our constituency case load—has increased over the years, and that has made it increasingly difficult for individual Members of Parliament to fulfil all the different facets of their role effectively. The most important facet of our role is as

members of the legislature, but we also have important roles in scrutiny, in holding the Government to account and in representing our constituents' interests. It is extremely difficult to do all that in the time available.
It is especially difficult for Government Back Benchers to contribute in the Chamber. When there are debates on less popular issues it is fairly easy to get in, but the crucial debates are often heavily oversubscribed and, even with time-limited speeches, many of us are unable to get in. I expect that the demand to speak in such debates is suppressed because Back Benchers know that even if they put their names down, the chances of being called are slim. If we are called, it is likely to be at the very end, and hon. Members are disinclined to sit here for six hours on the off chance, especially when there are so many other demands on our time.

Mrs. Dunwoody: If one makes a speech in a debate, is not one of the courtesies to listen to others advancing their points of view? If we simply make a speech and then leave, is not that the antithesis of debate?

Dr. Starkey: I accept that point absolutely, but I note that many of the more senior Members, who are lucky enough to be called early in debates, do not observe that courtesy and remain to listen to the contributions of those who are called later in the debate.
Select Committee reports are not well discussed on the Floor of the House. I agree absolutely with the point made by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) that Select Committees are a crucial part of our scrutiny mechanisms and are often hugely more successful in that role than ministerial questions or even Opposition day debates. The reality, however, is that most Select Committee reports are unheard by the House; and I suspect that most of them are unread by most Members of Parliament who do not happen to be members of the Select Committee concerned.
We have heard that fewer than 10 per cent. of the reports are debated on the Floor of the House; apparently, more than two thirds are not even referred to on the Floor of the House. That is a huge waste of the efforts of the members of those Select Committees and of the enormous expertise that goes into the reports. The proposals will go some way towards remedying that situation by providing additional time to debate them.
Adjournment debates are a key way in which Back Benchers can define the agenda of the House. All too often, the role of Back Benchers is simply to respond to an agenda set by their Front-Bench colleagues. The Adjournment debate is the one chance for Back Benchers to raise either issues of concern to their constituents or specialist issues. In an Adjournment debate they can consider in much greater depth issues that they might otherwise attempt to raise in questions.
For example, my hon. Friend the Member for Southampton, Test (Dr. Whitehead) secured a debate on the governance of universities that raised interesting questions about the way in which certain governing bodies are not living up to the high expectations that we have of them. As we have heard, Adjournment debates are heavily oversubscribed, and I expect there is suppressed demand. I think that it was my hon. Friend the Member for Ilford, South (Mr. Gapes) who made the point about the timing and timeliness of Select Committee reports;


similarly, there may be a constituency issue that one wants to highlight, but the moment may have passed by the time one's name comes up.

Mr. Steve Webb: I agree with what the hon. Lady says, but does she share my reservation about the proposals in that one element of them is the removal of the Wednesday morning Adjournment debates in the House? Surely we could have additional time in the House, too, so that we do not end up debating welfare reform at 3 am.

Dr. Starkey: The reason for suggesting the change on Wednesday mornings—incidentally, an additional three hours is set aside for Adjournment debates in the Westminster Hall Committee, so they are not simply being shifted from one place to another—was to try to meet the concern that many hon. Members expressed about the lack of access to the Chamber for visitors. The proposal is experimental and it would clearly be open to hon. Members to suggest the reinstatement of the Wednesday morning sessions here in the main Chamber.
A recent Modernisation Committee report changed the hours of sitting on Thursdays. Conservative Members—and some Labour Members—keep putting it about that the change has somehow reduced the time available in the Chamber, but it has not. It has rearranged the hours but not made any change to the time available. It appears to me that it has allowed us to make much better use of Thursdays than before. We rarely used to have a full day's business on a Thursday, but now we can have that and still allow our more distant colleagues to get back to their constituencies for the weekend.
None of the earlier proposals dealt with the essential problem that we want to fit in too much business in too little time. The proposals for a parallel Chamber in Westminster Hall will create that extra debating time without increasing the overall hours of sitting. Very unusually, we are in a win-win situation. The right hon. Member for North—West Hampshire (Sir G. Young) outlined the advantages for the Opposition, and there are advantages for the Government, but most of all there are huge advantages for Back Benchers. It is extremely important to get that idea across. The Opposition argue that the power of the Executive in Parliament is too great, and the one part of that argument that I would accept resides in the fact that Back Benchers have very little room to discuss their issues. The proposals will give them more power and even up the balance between them and Front Benchers.
The idea of a parallel Chamber was borrowed from the Australian Parliament. Members of the Modernisation Committee have seen a video of the Australian Main Committee. It was not a good advertisement because it was excruciatingly boring, but I suspect that that reflects more on the Australian Parliament than on the difference between its primary Chamber and its Main Committee. The interesting lesson from Australia is that the experience has been extremely positive. There was a significant body of opposition to the idea in the first place, but hardly anyone opposes it now. People have changed their view after seeing the Main Committee in operation.
The Westminster Hall Committee will have several advantages. The proposed Westminster Hall Committee will provide an alternative forum and will allow business

to be discussed, the demand for which is currently unsatisfied. Several people have mentioned what sort of business that should be, but the key point is that it would mean an increase in the time for private Members' Adjournment debates and for Select Committee reports. Extra business could also be taken in Westminster Hall. For example, when we have debates on foreign affairs, instead of a wide-ranging debate that flits about the world illogically in a disconnected series of speeches, we could have debates on a specific region, giving some continuity and sense to the proceedings.

Mr. Maclean: I do not entirely follow the hon. Lady's train of thought that discussing a geographical region is necessarily the most sensible approach. If one is discussing an ethical foreign policy, for example, it would make sense to discuss Africa, South America, Malaysia and perhaps other parts of the world. That approach would ensure consistency.

Dr. Starkey: We could have a topic-based debate, if we wanted to talk about an ethical foreign policy. However, it is also important to have regional debates. The Foreign Affairs Committee is considering the trans-Caucasus and it would be sensible to have a debate on that subject. That would raise issues that might be lost in a general debate about foreign policy.
The Westminster Hall Committee would also give us an opportunity to debate Green Papers and other Government consultation documents. At the moment, it is rare for such documents to be discussed on the Floor of the House. Such debates would give Members of Parliament an opportunity to contribute at the beginning of the consultation period, instead of having to wait until policy had been decided, when anything they said would be much less effective.
My hon. Friend the Member for Salford (Ms Blears) mentioned the opportunities for regional debates and she gave an example of interest to her region. I would be interested in a debate on the east-west rail link, for example. That issue covers about four different regions, but is of interest to Members who represent constituencies along the route.
Westminster Hall debates would also allow greater participation for a wider range of Members. I have mentioned the difficulties Back Benchers have in participating in debates in the Chamber. Many hon. Members bring specific expertise from their previous lives that they rarely have an opportunity to use. Debates in Westminster Hall, on more specialist topics, might allow them to do so.
Different arrangements are proposed for the Westminster Hall Committee. The anecdote retailed by my hon. Friend the Member for Crewe and Nantwich illustrates the point that if a hall has no amplification, there is a reason for having the speaker on a platform; if the hall has decent amplification, there is no reason for that. It is a reality that the way in which a meeting is organised influences the way people behave. People who are enamoured of the confrontational set-up try and argue that the arrangement makes no difference, but they defend vigorously the need to stick to it.
Some debates are confrontational. I am as confrontational as the next person and I enjoy the cut and thrust of party debate when the issue being debated


actually divides the parties. However, many issues—especially those likely to be discussed in Westminster Hall—do not divide the parties. They may provoke differences of opinion, but those might run across the parties. A hemispherical and more consensual seating arrangement is much more conducive to a genuine, complex debate—the sort of debate that goes very badly on the Floor of the House.

Mr. Paul Tyler: Has the hon. Lady noticed that if we had been sitting in that format tonight, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) would have been sitting next to the right hon. Member for Bromley and Chislehurst (Mr. Forth)?

Dr. Starkey: That would be my hon. Friend's choice. Some of us went to look at the Grand Committee Room when it was laid out as it would be for the hemispherical arrangement. We could not believe that it was the same room, because the change made it much more pleasant. It would also be much more useful for meetings when it was not in use for the Westminster Hall Committee.
Another issue for consideration is how to open up the Westminster Hall Committee to people from outside and the possibility of facilities for the press, including the regional and specialist press. It has been remarked that most of the press coverage of Parliament at the moment is through the Lobby journalists, who tend to concentrate on the big political debates, especially those in which there is conflict. That is what makes good political copy and gets on the front page. The debates in Westminster Hall would often be of great interest to sections of the public, but they do not interest the Lobby journalists, who do not have the expertise to follow them and do not understand why they are interesting.
The current press coverage of the House does us all a great disservice. It gives the public a distorted view of the proceedings of the House by focusing only on the big set-piece controversial debates and ignores all the hard work done elsewhere in the House. By giving additional space for regional and specialist press, Westminster Hall would widen the press coverage for the House and get coverage of interesting and complex debates in the specialist press. For example, a debate in the House on women in science was of enormous interest to the scientific press, and had it taken place at a more conducive time and place, the reporters from the scientific press would have been here instead of having to rely on my press releases afterwards.

Mr. Graham Brady: Do not the technical press normally read the Hansard report? They get all the details from that and rarely work to close deadlines.

Dr. Starkey: They can get the details from Hansard, but if that was a satisfactory way to cover the House, Lobby journalists would never bother to be here—they would just wait for Hansard. They come here because they get the news hot off the press, so to speak, and also because they get the flavour of the debate, which it is difficult to get from Hansard. Hansard writes it all down, but it is all incredibly dry compared with the

toing and froing of some debates. I am not sure, for example, that Hansard will have quite caught the flavour of the question and answer in Prime Minister's Questions last week involving the hon. Member for Southend, West (Mr. Amess), whereas the Lobby journalists, being present, got the flavour in full.
This House has a tradition of evolutionary reform and this proposal is part of that approach. It is a response to changing times and expectations. It offers an excellent opportunity to the House to respond to those changes and I enthusiastically urge support for the proposals.

Mr. Andrew Stunell: I speak as an enthusiastic supporter of the report, a member of the Modernisation Committee and a member—by some strange quirk of fate—also of the Procedure Committee and the Broadcasting Committee. I have considered the proposals from various angles over the past few months. Those who wish to advocate strongly on either side should consider the underlying questions—what is this House for; is it doing that job properly; and, if not, what are the most effective ways of making it do so? The second report offers a good, practical critique of what is not working very effectively at present. It contains a good encapsulation of the criticisms that Members of the House—on both the Front and Back Benches—have, and of their frustrations about the way in which things work.
It is worth asking what the House is for. I maintain that it is not for getting good press coverage, or for securing a certain number of television minutes. The House has a constitutional purpose. Reforms, and the resistance to them, should be based on whether that constitutional purpose is enhanced.
The first major job of Parliament and the House of Commons is to provide the ingredients for Government, so that a Government can be formed and their activities legitimised. This debate does not cover that task, although much could be said: the phrase "elective dictatorship" still resonates for many people 30 years after it was coined.
The second task for Parliament and the House of Commons is to ensure that the legislation produced to form the laws of the land is coherent, effective and sound. The Leader of the House said that the Modernisation Committee has made some useful moves in that direction. It has called for pre-legislative inquiries, and proposed that legislation be rolled over so that it can be produced more evenly throughout the calendar year. It has also proposed that timetabling be used in certain agreed circumstances, and suggested that follow-up reviews be conducted into legislation that has been passed—something that we have not yet reached. In addition, there has been an important report on changing the scrutiny of European legislation.
We must recognise that there have been failures in the way that the House has handled legislation in the past. The Child Support Agency achieved all-party support and was a catastrophe; the poll tax achieved anything but all-party support but was also a catastrophe in legislative terms.
The volume and complexity of legislation is increasing all the time. The pressure comes just as much from members of the Opposition parties as from Government manifesto commitments. The Modernisation Committee has also taken evidence about the backlog of law still


awaiting processing in the House. There are Law Commission reports for which time cannot be found, and other pieces of non-controversial but difficult legislation also await consideration. For example, my hon. Friend the Member for Winchester (Mr. Oaten) is tackling adoption legislation in a piecemeal way—perhaps I should say that he is dealing with one specific aspect of the legislation—simply because there is not sufficient time for the Government to produce comprehensive proposals.
The pressure is always to find more time and space in the House, and to find better ways and mechanisms for getting legislation through, after proper consideration, and for getting it enacted and reviewed. The report does not propose making more time for legislation, but it will achieve that by removing work from the House of Commons. That is the benefit to be gained.
Another of the functions of the House and of Members of Parliament is to hold the Government to account. Hon. Members are more than familiar with the processes involved in questions, statements, debates and ministerial responses. However, I want briefly to make a case for the half-hour Adjournment debates, which in essence offer the opportunity for extended questions to and answers from Ministers.
We have heard tonight that there are five times more applications for the late-night Adjournment debates than there are spaces available, and that there are 10 times more applications for the Wednesday Adjournment debates than there are opportunities to hold them. Those debates are not simply a chance for hon. Members to put out press releases, which was the somewhat sneering contention made at one point in the discussion. They are much more to do with holding the Government to account over local or specific injustices or over general policy.

Mr. Maclean: The hon. Gentleman says that Adjournment debates are an opportunity to hold the Government to account, but when did such a debate last frighten a Government and hold them to account?

Mr. Menzies Campbell: The debate on war pensions.

Mr. Stunell: That will do for one, but those who criticise the effectiveness of Adjournment debates need to say when last a question—written or oral—received an answer that was not already under the Government's control. It can be argued—although I do not do so especially strongly today—that it is hard to put one's finger on a single aspect of our procedure that produces results. The examination of statutory instruments came to the Committee's attention recently. In the 1995–96 Session, 209 statutory instruments came before the House. Not one was amended in any way—or rejected, or delayed—as a result of parliamentary scrutiny.
The argument is not about whether Adjournment debates achieve anything. The whole process of politics raises a question about the effectiveness of Members of Parliament. This debate is about providing opportunities to increase the pressure on Government for accountability, and about providing the pressure to ensure that there is better accountability.
Another function of Members of Parliament is to represent our constituents and to seek justice and equity for them in what is the highest court in the land. We do

that by means of parliamentary questions and letters to Ministers, but many hon. Members would like to do it through the extended question-and-answer sessions offered by Adjournment debates. At the moment, there are 240 Adjournment debates each year. If those debates were shared out, each Member of Parliament would get about one debate every three years. The need and pressure to do more in that regard is clearly intense.
The proposal for the Westminster Hall operation that is before us today is certainly not a magic solution or a panacea. I absolutely agree with the right hon. Member for North-West Hampshire (Sir G. Young) that the proposal will go only a small way towards putting right some of the problems that we face in making this place effective. However, the proposal can make time for proper consideration of controversial legislation in the House of Commons. It can help to find time for Select Committee reports, as has been noted. It can also help to provide opportunities for major Adjournment debates, and the hon. Member for Milton Keynes, South-West (Dr. Starkey) has suggested that that would be useful for foreign affairs debates about specific areas.
The proposal also means that we will be able to hold more 30-minute Adjournment debates, which will help to hold the Government to account and allow constituents' concerns to be heard and answered. We shall have an opportunity, not much mentioned so far, to comment formally at an earlier stage on Green Papers and consultation documents.
The proposal should find favour with all Members of the House.

Mr. Eric Forth: No.

Mr. Stunell: It should benefit Back Benchers, our constituents, Select Committees and those who introduce reports from those Committees. It should allow those with special policy interests to develop them formally. It should benefit both the principal Opposition and the other Opposition parties, giving an opportunity to challenge and discuss what the Government are doing across a wider range of topics. It even gives the Government some benefits, offering the opportunity for improved outputs from both the House and the Government.
The right hon. Member for East Devon (Sir P. Emery) said that the value of the House of Commons should not be downgraded. I agree with that, but I must point out, as one who sits in on Adjournment debates and pays attention to what happens here, that the proportion of Members who find it possible to spend a significant amount of time in the Chamber is low. If 10 per cent. of Members are here, the 60 or 70 of them make the House look full, but the other 90 per cent. of Members are finding other things to do. The proposal poses no great risk to the credibility or effectiveness of the Chamber, and the new arrangements will provide opportunities for Members to bring concerns into the public domain and to challenge the Government.
To those who have muttered throughout my speech, from Bromley and from other places, I can say only that a mixed message comes from the critics. The right hon. Member for Bromley and Chislehurst (Mr. Forth) has appeared to maintain from a sedentary position that he can see nothing wrong with the present system and everything wrong with any suggested change. Yet I have heard the


right hon. Gentleman several times speaking with outrage about the Government's overweening power and the way in which the House is being suborned and undermined.
We have before us an opportunity to improve the situation, but, lo and behold, the right hon. Gentleman is not jumping to embrace the idea, but doing his very best to wreck it. It is time that he made a short trip to the road to Damascus. He ought to recognise that if he wants improved accountability and more effective control of the Executive, our current procedures are not sufficient.
I wish that the proposals before us went further. I wish that we were proposing sittings lasting the full 18 hours proposed in the Select Committee report, not the shorter sittings proposed in the motion. I should like other things too, and I have mentioned them elsewhere. We should move rapidly to having statements timetabled in the way that questions are, so that Departments are given slots for statements. We should do the same with Select Committee reports. The proposal that topics should be chosen for debate by the Liaison Committee reflects our present procedures, but it might be more appropriate to give Select Committees a slot and allow them to choose the report for debate.
I would set aside additional time for Adjournment debates scheduled by Department or by policy area, so that bids for them could be more structured than they are under our current random system. I support the suggestion of the right hon. Member for East Devon that we should seek to restore some quality control and effectiveness to early-day motions and private Members' motions, although I am afraid that I am too young to know anything about the latter.
I urge the House to support these sensible and symbolic proposals for improvement. They are a step towards a more modern and effective legislature, and I hope that the House will resist the various wrecking moves.

Mrs. Dunwoody: On a point of order, Madam Speaker. When we have this new, excellent Chamber, will there be a continuation of the Standing Order that states that hon. Members should not read their speeches word for word?

Madam Speaker: I am sure, and I would hope, that our Standing Orders will apply to the parallel Chamber. The strictures on rhetoric and repetition should also apply.

Mr. Peter L. Pike: I speak as another enthusiastic supporter of the Westminster Hall Committee. I hope that not only will the report and the proposed Standing Order changes be accepted, but that it will be the will of the House to give the experiment a fair wind and trial and not to kill it at birth.
I am one of those Members who believes that some of the Modernisation Committee's proposals to date have not been the subject of the experimentation and trial that I would have liked. If the carrying over of legislation and many other proposals had been fully implemented, it could have improved the way in which the House scrutinises and works. However, 1 accept that it is early days and experiments are still taking place.
It is important to accept this proposal because it will enable the House and the Modernisation Committee to consider the parliamentary year and week. I am not

talking about Members of Parliament working less because that is not what I am in the business for. We have a varied and mixed job, with work here and in our constituencies, but sometimes that work is not as effective as it should be. It is nonsense that we do not know when the recesses will be. I accept that the House could be called back and the dates changed in a national emergency, but we should be able to plan. Our constituents think it crazy that we cannot tell them when we will be in the constituency.
Likewise, non-sitting Fridays tend to come in groups and then we have a mass of sitting Fridays. If one has urgent things to do in the constituency—and this is particularly true of those hon. Members who represent constituencies some distance away—it is extremely difficult. Sometimes, I have a whole list of things waiting for me to do. As you may remember, Madam Speaker, I was involved in three successive private Members' Bills on Fridays, and that makes life difficult.
Once the new system is working, I would like private Members' Bills to be moved to Wednesdays. That has not been discussed or agreed by the Modernisation Committee, but it is my view. That would be a fairer way to scrutinise and debate such Bills and it would allow the opportunity for them to make progress if they have the support of both sides of the House. That is one reason why I want to open up our procedures and allow more time for debate.
The cost of the experiment is being kept to a minimum. The Modernisation Committee was concerned about cost and one or two hon. Members have mentioned it in the debate. Most of the expenditure referred to in the report was scheduled for the Grand Committee Room in any event either this year, next year or the following year. That money would have to be spent anyway.

Mr. Swayne: No.

Mr. Pike: Yes. It is scheduled in the programme of work. We were told so by the Serjeant at Arms when he gave evidence to the Committee. We made it absolutely clear that we did not want the purpose-built furniture for the experimental period and that we must find furniture within the House to make the experiment possible. It is important to remember that.
I strongly support the proposal that the experimental parallel Chamber should take the form of a semi-circle. The Welsh Assembly and the Scottish Parliament have not gone for the format that is used in this Chamber because they wanted to try something new. I would strongly resist, as would you, Madam Speaker, the suggestion that we should knock the walls down to the Division Lobbies and put in a new Chamber here. This Chamber is right—it is historically right and we should preserve it. However, in the new situation it is right to start with something new. That is one reason why I opposed the idea that the experiment should take place in Committee Room 14, which was one option.
Anyone who is keen on the Select Committee system, as I am, should fully support the proposal. I have listened to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and I have great regard for her, but I strongly disagree with her on this issue. The proposal will create extra opportunities to consider Select Committee reports that are not currently debated and so serve a more


useful purpose. I should have thought that any hon. Member on a Select Committee would welcome that. Paragraph 28 of the report clearly states that the Liaison Committee will retain its role in determining the subjects to be debated.
The additional opportunities for hon. Members to hold Adjournment debates are welcome and important, but enough has been said on that. We should keep motions under review. I hope that not only the Modernisation Committee but the whole House will keep the experiment under review. We should not wait 14 months but learn from how the new Chamber functions. If we need to adjust it in December, January or February, we should make the adjustment straight away. Obviously, that would have to be done under the Standing Order changes that we are considering today.
The right hon. Member for East Devon (Sir P. Emery) mentioned early-day motions. Like him, I think that they have become nonsense. They can congratulate anyone. We once congratulated a football club on reaching its highest league position, although it has now been promoted to the Premiership. That shows how silly some early-day motions have become. In Committee and elsewhere, I have noted the dangers of saying that early-day motions should be determined as of right. We should not work by numbers, but by importance and subject. We all get letters and other forms of pressure and the fact that we receive a certain number on a certain subject does not necessarily prove that it is the most important. We must watch that carefully.
As an Opposition Member, I spoke on South Africa in a foreign affairs debate when the person before me had spoken about China and the person after me about Brazil. What nonsense. The new Committee will allow us to discuss important subjects. I accept that sometimes an issue, not the region, will be important, but that can also be accommodated.
The proposal is a tremendous move forward. Once we have experimented with it, given good will and an intention to make it work, in a year or two we will want to sit more than the proposal allows. It will be good for the Opposition, the Government, and most important, for the Members of this House to debate the issues that we feel are important.

Mr. Eric Forth: I oppose the proposal and dispute almost every aspect of both it and way in which it has been presented in the report. I want to take issue immediately with what I see as the report's rationale, which is contained in paragraph 3. It states:
There is almost universal agreement that there are matters which the House should discuss,"—
that is probably true because it is an easy and cheap thing to say—
"which a large number of Members would wish to discuss,"—
I doubt that—
"but for which there is simply not enough time."
I wish first to take issue with the point about time. Typically, my right hon. Friend the Member for Penrith and The Border (Mr. Maclean) went to the heart of the matter. The truth is that there is no shortage of time, or there need not be. We are leaving a day early for our recess this very week. The Leader of the House has had

the gall to say that we do not have enough time but proposes that the House rise a day earlier than originally envisaged. That gives some sense of the urgency involved.

Mrs. Beckett: I am sure that the right hon. Gentleman was here—I know that he listens with great assiduity to what is said in the Chamber—when I pointed out that the time proposed in the report would suffice for 200 extra debates. I doubt whether we could accommodate those, even in an extra day.

Mr. Forth: I was coming to that point. The Leader of the House should not be so impatient. I am developing my initial thoughts, and I do not think that she wants to detain me for too long at this stage of the debate.
Having demonstrated the extent to which we lack time by sending the House away unnecessarily early, the Government have also, in effect, abolished Friday sittings. The House used to sit on Fridays; we used to regard our job here as a proper job that would take up our time. Apart from private Members' Fridays, Friday sittings have now all but gone. We have casually tossed aside parliamentary days. That strikes me as slightly odd when we hear that we are short of time.
Business in the House is often unnecessarily prolonged by the Whips for the convenience of Members. People outside the House do not understand that matter fully—perhaps mercifully, for hon. Members. However, we all know that, because a vote is timed for 10 o'clock, if a debate naturally comes to an end before that time, the Whips will encourage Members to come into the Chamber to prolong the debate for the convenience of other Members returning at 10 o'clock. To allow the debate to finish naturally at 6 o'clock or 7 o'clock, as many debates would do, allowing us further time to carry out other business, would inconvenience many Members because they would have to be in the House. That is the last thing that Members want. They always want to be somewhere else on Fridays—

Mr. Gapes: rose—

Mr. Forth: Here is one of them. I give way to the hon. Gentleman.

Mr. Gapes: I am grateful to the right hon. Gentleman. Has he considered his role in wasting parliamentary time, over many weeks, on Fridays and late at night?

Mr. Forth: The hon. Gentleman obviously believes that to be in the Chamber and to participate in debates is wasting time. That is where he and I fundamentally disagree. My point is that, for those of us who believe that participation in debates should be most of what we do, it is important that that time should be used properly. We like to spend time in the Chamber; we believe that that is a valuable exercise. The hon. Gentleman does not share that view—

Dr. Ladyman: rose—

Mr. Forth: Here is another. I give way to the hon. Gentleman.

Dr. Ladyman: I am grateful to the right hon. Gentleman. May I put the point slightly differently? Is it


not true that he represents a constituency in the Greater London area? It is, therefore, much easier for him to attend the House on Fridays, but still to give his constituency the attention that it deserves. That is less easy for Members from further afield.

Mr. Forth: That might seem to be a clever point. However, as the hon. Gentleman is never here on Fridays, he will not be aware that my right hon. Friend the Member for Penrith and The Border is in the Chamber every Friday that I am here. He and I believe that it is important to be in the Chamber in order to discharge our parliamentary duties. I do not know whether the hon. Gentleman's constituency is further away than Penrith and The Border—I doubt it—but if my right hon. Friend can take his duties that seriously, I suggest that the same should be true of most hon. Members.

Dr. Ladyman: The last time that I was in the Chamber on a Friday, I heard the right hon. Gentleman and the right hon. Member for Penrith and The Border (Mr. Maclean) filibustering a Bill that was supported by almost everyone else in the House. That was wasting parliamentary time.

Mr. Forth: The hon. Gentleman was obviously not here last Friday, when his Government talked out a Bill that also enjoyed a wide degree of support. I do not think that it is useful to trade those sort of exchanges, although I shall gladly do so because, to date, the Government have objected to more than 30 private Members' Bills—a total to which even I cannot remotely aspire.

Mr. Maclean: I am grateful to my right hon. Friend for giving way. I too was going to point out that the Labour Government have blocked more than 30 Bills so far this Session. Will my right hon. Friend bear in mind that, on most Fridays, Ministers have congratulated him, and sometimes even myself, on tabling amendments that improved Bills? I will give the hon. Member for South Thanet (Dr. Ladyman) the references if he wants me to do so; I have used them extensively in press releases.

Mr. Forth: I hope my right hon. Friend will share those references with me. I would probably find them useful as well.
The time element is bogus. The truth is that, if Members wanted to find more time, they would be perfectly capable of doing so. The tragedy is that there is a conspiracy among those who manage our time: they send Members away from here as much as possible, but then have the gall to come here and say that there is not enough time.
I also dispute the notion that there is huge demand for the change. It strikes me as bizarre that it is proposed that the quorum of the exciting new development, for which there is such demand, should be three. We have been told by those who have participated in the debate that the new Chamber will be crowded with excited Members who have important matters to debate—but the quorum is to be set at three. That does not suggest any great demand.

Mr. Andrew Dismore: Would the right hon. Gentleman remind us how many Members voted on Friday at the end of the debate on the private Member's Bill?

Mr. Forth: Yes, three Members voted on Friday. That only three of them were here to vote is surely a disgraceful condemnation of the 417 Labour Members of Parliament. I agree with the hon. Gentleman that the number voting was a shameful display of Labour Members' lack of interest in the House of Commons.
I doubt that the change is to be carried out as an experiment. We have heard that before and we know that change is a one-way street. I remember hearing that televising the House was to be an experiment, yet it was automatically continued because of a sort of momentum that such developments gather. We know that changes that are designated experiments are rarely reversed, because a sense of ownership develops among those who have a vested interest. I also doubt the reassurances in respect of expenditure.

Mr. Tyler: I am fascinated by the right hon. Gentleman's new line of argument. Is he saying that we should never experiment or make any change; or that, if any change is to be made, it should not be experimental? He would appear to be arguing in favour of one or the other of those propositions, but I do not understand which.

Mr. Forth: I am not a great advocate of change and I make no secret of that. I am generally rather satisfied with the way the House runs under your excellent tutelage and guidance, Madam Speaker, so 1 am in no rush to make gratuitous and unnecessary changes.

Mr. Maclean: Those hon. Members who are in favour of the new system and suggest that it is somehow evolutionary ignore the fact that Prime Minister's Question Time has been changed, initially without Madam Speaker's consent, and that the House of Lords is to be abolished. Wholesale changes are being made to Parliament, so to suggest that the proposed development is a minor change that can be treated in isolation is preposterous.

Mr. Forth: My right hon. Friend is absolutely correct. Therefore, I feel no sense of shame when I say that I am not a great advocate of or enthusiast for change.
To return to the subject of expenditure, 1 was about to refer to appendix 4, headed "Further Letter from the Serjeant at Arms" and dated as recently as March 1999. The Serjeant at Arms gives the total cost of this foolish exercise as £870,000 and adds, most revealingly:
"there is no provision for expenditure of the order of £870k on the Grand Committee Room in next year's estimates … and the indications are still that a Supplementary Estimate will be required for the Works Vote to cover the costs of the work."
So much for the bogus claims that the proposal carries no financial implications and can somehow be fudged through under existing expenditure plans.

Mr. Pike: What I said was that the money was in the rolling programme. The Serjeant at Arms made it absolutely clear that, if we did not spend the money this


year, it would be spent within the next two years, or three years at most. The money had to be spent on things that urgently needed doing.

Mr. Forth: I am sure that the taxpayer will be hugely reassured that this is all part of rolling expenditure. Taxpayers must feel really relieved to be told, "Don't worry—it was all going to be rolling expenditure, but it's just been brought forward a bit." I do not believe that and I do not suppose that most of the taxpayers I encounter will either.
I shall now speak briefly on the substance of amendments that you have kindly selected, Madam Speaker. I hope to divide the House at the appropriate time. The first simply reflects my belief that, instead of giving the new chamber the rather misleading name of "Westminster Hall"—I cannot imagine where that term comes from, since it is not Westminster Hall that we are dealing with—we should call it the "Commons Committee". If we are to have it at all—I would rather we did not have it, and I want to vote against the substance of it—we should call it the Commons Committee to make it clear that, were such a ghastly experiment to be embarked on, it would be clearly subsidiary to proceedings in the Chamber of the House of Commons.
My second amendment seeks to retain Wednesday morning sittings in this Chamber and to make anything that happens in another Chamber subsidiary to debates in this place. There is no question that what happens in another Chamber can be a substitute for sittings in this place. We must make that absolutely clear.
I also seek modestly—I was tempted to pitch the figure higher—to make the quorum six instead of three. I have thought about this issue for some time. Presumably a Minister would be present, with a Whip on duty, perhaps an Opposition spokesperson and the perpetrator of the debate. Therefore, I think that a token extra two or three Members should be sufficient to signify the huge demand that we are constantly told there will be for such debates. If we are to believe the comments this evening, this Chamber is normally crowded with 40 or 50 Members of Parliament. Therefore, I think it is reasonable to rule a sitting of the parallel Chamber inquorate if there are fewer than six Members present. That is a reasonable level so as to test demand.
The absurd, politically correct and consensual hemicycle arrangement must be resisted as a continental nonsense run wild. I make this point with some feeling because—I do not often admit this in the Chamber, but I shall do so to the few friends sitting around me—I was once a member of an institution that met in a hemicycle. For five fascinating years, I sat at a desk with a microphone and a voting machine. That institution was called the European Parliament—I say that as quietly as I can, Madam Speaker. I must make that admission about my past, but I cannot say that I was too enamoured of the arrangement. This Chamber allows for much more lively and legitimate debate, and it is far better than having Members sitting in designated places, usually reading from pre-prepared speeches and breaking the Standing Orders, as has been mentioned in the debate.
Those are my reasons for opposing this change. I think it is unnecessary, dangerous, expensive and almost certainly irreversible. I fear that it will divert attention away from the Chamber and feed the myth that the Leader of the House and others are attempting to perpetuate, that somehow there is huge pressure on the time of the House. The truth is that, if we wanted to find the time, we could sit on Fridays, reduce the recesses and not rise a day early. We could also shorten debates that do not generate sufficient interest and spontaneously debate other issues. Admittedly, such changes would require a degree of commitment from hon. Members that I suggest is simply not there any more. For that reason, more than any other, I regret this measure.

Dr. Stephen Ladyman: I am delighted to follow the right hon. Member for Bromley and Chislehurst (Mr. Forth) in the debate because an article that I read in yesterday's newspaper prompted me to seek to catch your eye this evening, Madam Speaker. In yesterday's Sunday Telegraph, the right hon. Gentleman is reported as saying that he believes that the Government are creating another opportunity for hon. Members to drone on and on. I nearly choked on my breakfast when I read that—a case of a sootier pot calling a kettle black I have never heard of.
The right hon. Gentleman mentioned the sitting hours of the House and said that our recesses are too long. However, he ignores completely the fact that hon. Members have constituency duties that many of us try to discharge well, and that requires considerable amounts of time. If I were given a magic wand with which to reform the House in any way that I saw fit, I would grant the extensions of time in this Chamber to which the right hon. Gentleman referred as well as establishing a parallel Chamber in Westminster Hall. I think we could occupy both Chambers for greater lengths of time by debating important issues that concern our constituents.
Opposition Members often say that the purpose of the House of Commons is to challenge the Executive and hold it to account, yet tonight some of them are rejecting the opportunity to do that to a greater extent.

Mr. Maclean: Does the hon. Gentleman seriously think for one moment that his Government would introduce and support these proposals if they thought that they would result in the Government having to be more accountable to Parliament?

Dr. Ladyman: Yes, I do. The Government have introduced many reforms of the House. I shall give the right hon. Gentleman two examples. First, he and I sat on the Select Committee that considered the draft Bill to set up the Food Standards Agency. That procedure had not been used before and gave the House an opportunity to examine Government legislation in greater detail.
Secondly, I have just finished participating in a Special Standing Committee considering the Immigration and Asylum Bill, which was another attempt by the Government to increase parliamentary scrutiny. Previous Conservative Governments set up no such Committees in their 18 years in power.
Several hon. Members have made a slip of the tongue and referred to the proposed experiment as the Westminster Hall Committee. As I understand the proposals, they do not relate to a Committee, but specifically refer to the House sitting in Westminster Hall.

Mr. Tony McNulty: How can that possibly be if the sittings will involve only 51 Members?

Dr. Ladyman: Under the proposed arrangements, all Members will have the opportunity to attend and sit in Westminster Hall. There are not enough seats in this Chamber to accommodate every Member, so how many seats are available in the new Chamber is neither here nor there.
My point is that we cannot argue that the House will be diminished when all that is being proposed is that the House should sit in a place other than this Chamber. The same Members will be contributing to the debates and the quality of the debates will be entirely dependent on the quality of those Members, just as it is in this Chamber. I therefore reject the argument that the House will be diminished.
The proposals will allow us to debate a wider range of subjects. If I have any criticism of the report it is that the proposals will not allow a sufficiently wide range of subjects to be debated in the new Chamber, and I hope that the range will be extended in the future. I wrote to the Modernisation Committee and suggested that we could reasonably assign to the new Chamber the Committee stages of constitutional Bills. At present, those debates occur on the Floor of the House.

Mrs. Dunwoody: Is my hon. Friend suggesting that changes to the United Kingdom's constitution should be debated in a subsidiary room in which only 50 Members can appear?

Dr. Ladyman: I am absolutely not suggesting that because the proposal is not for a subsidiary room but for the House to sit in Westminster Hall.

Mr. Gerald Bermingham: Does not my hon. Friend agree that the one thing that experience teaches us about this place is that the chances of being called to speak are pretty slim? In a 51-Member Chamber, will not the chances of a Member being called be even slimmer?

Dr. Ladyman: If my hon. Friend will forgive me, I will deal with that point in a moment because the answer to his question is one of the most important reasons why we should set up such a Chamber.
In addition, the new Chamber could consider certain aspects of European legislation. The Select Committee on European Scrutiny recommends that many aspects of European legislation should be debated on the Floor of the House, but we cannot do so. Is there not an opportunity for extending the scrutiny of European legislation?

Mr. McNulty: Does my hon. Friend agree that there might be further opportunity to have those debates on the

Floor of the House if we retained Wednesday morning sittings, rather than abolishing them as the report suggests?

Dr. Ladyman: My hon. Friend makes a good suggestion. When the experiment is reviewed, no doubt one of the proposals that we could consider is restoring Wednesday morning sittings in addition to having sittings in Westminster Hall.
My final reason why Westminster Hall will be a great improvement to the Chamber is that it will provide more speaking opportunities for the Members who have so few opportunities to speak in this Chamber.
You, Madam Speaker, spend a great deal of your time—it is one of your most important duties—trying to be fair in calling Back Benchers. It would be disrespectful if I called what goes on in your office when deciding who should be called as black art, so I shall refer to it as divine magic. Although it is pretty impenetrable to me, I can work out some of the factors that you consider when deciding whom to call.
You balance the debate; you do not reflect the membership of the House. Given that 60 per cent. of hon. Members sit on the Government Benches, and only 40 per cent. on the Opposition Benches, we on the Government Benches are at an immediate disadvantage.

Mr. Christopher Fraser: Come and join us.

Dr. Ladyman: I am loth to answer that sedentary intervention.
Government Members have far fewer opportunities to be called. One of the factors that you probably take into consideration, Madam Speaker, is the frequency with which we have contributed to debate. By the end of a parliamentary year, a Government Member who has contributed less than oneself is more likely to be called first. One is therefore increasingly unlikely to be called not only in important debates, but even in relatively less significant ones.
As it works out, new Government Members can be called probably only six or seven times a year. That means that we must manage our contributions—not using up all our opportunities to speak—so that we may have a reasonable chance of being called later in the year in debates that are important to our constituents. A further Chamber, sitting in parallel, could provide an opportunity to contribute to debates on Select Committee reports, for example—many of which are important to our constituents—without using up our opportunities to speak.

Mr. Bermingham: A sudden thought has occurred to me; perhaps my hon. Friend will tell me, from his vast experience, how to solve it. What if there is a vote in this Chamber and a vote in that Chamber at the same time?

Dr. Ladyman: My hon. Friend has clearly not read the report; there will not be any Divisions in the other Chamber. However, when we review the experiment, we should consider ways of allowing controversial subjects to be debated there. The experiment should not end simply with consideration of whether we continue with a parallel Chamber. If we think that it has been a success,


we should consider whether to extend it, introduce controversy and schedule Divisions in two separate Chambers on the same evening.
The proposal is only an experiment. It would be a relatively minor change. I do not believe that it is the fundamental shift in importance from this Chamber that other hon. Members are suggesting. It is a way in which to enhance this Chamber and our debate—a means by which we may debate some subjects that will make our constituents sit up and take notice once more, instead of ignoring us as they do at the moment. [Interruption.] Opposition Members can laugh as much as they like, but their antics are the reason why people do not want to report the proceedings in this Chamber any more. The proposals are a way of addressing some of those concerns.

Mr. Nicholas Winterton: I hope that the hon. Member for South Thanet (Dr. Ladyman) is not going to spoil what this report says. There will be debates in what I would prefer to call the Commons Committee rather than sittings in Westminster Hall. That would clearly indicate that that Chamber, although part of this Chamber, was subordinate to it.
The Leader of the House was right to emphasise—it was emphasised too by my right hon. Friend the Member for North-West Hampshire (Sir G. Young)—that all matters debated in the Commons Committee would have been agreed across the Floor of the House and that votes would not take place. The experiment that I think the House will decide should go ahead is based on the Australian experience. I must remind the hon. Gentleman that votes do not take place in that Chamber either.

Dr. Ladyman: Will the hon. Gentleman give way?

Mr. Winterton: I will give way once to the hon. Gentleman.

Dr. Ladyman: I want to clarify my position. I fully accept that the experiment being proposed is exactly as the hon. Gentleman has explained, and I am delighted about that. I am merely saying that, if when we look at the results of the experiment we think it has been a success, we may then feel that we might like to consider extending it.

Mr. Winterton: I hope—I say this both as a Conservative Member and as a member of the Modernisation Committee—that our Chairman, the Leader of the House, would not seek to present proposals that would take us down that path. She nods, which suggests that she would not want that.
I enjoyed the speech of the hon. Member for Burnley (Mr. Pike), who is also a member of the Modernisation Committee. He made a good point. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who chairs the Liaison Committee, is present. It is vital for that Committee to play a pivotal role in deciding what Select Committee reports are debated in the sittings in Westminster Hall or what I shall again call the Commons Committee. We must keep the decision away from Government, Opposition and the usual channels if Select Committees are to retain and maintain their integrity, and

their authority to hold the Government of the day to account and scrutinise the success or otherwise of their management of the country.
The hon. Member for Milton Keynes, South-West (Dr. Starkey) and I agree on one or two elements in the report. One thing that she highlighted was that the video produced by the Australian Main Committee, which was viewed by all members of the Modernisation Committee, did nothing to sell the experiment to the House. I suspect that, if other Members of Parliament had seen the video, more of those who are enthused by what they read in the Modernisation Committee report would take a different view. It was boring beyond words. Let me tell my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) that only the required quorum was there to take part in what was a very turgid debate.
The House ignores the views of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) at its peril. Let me say, as a Conservative Member, that she is an immensely impressive politician.

Mrs. Dunwoody: The hon. Gentleman is doing my reputation no good.

Mr. Winterton: The hon. Lady may say that, but she is highly regarded, and I believe that her understanding of democracy and the way in which the House operates is second to none. Her earlier contribution was very helpful.
I make my speech wearing two hats. I am a member of the Modernisation Committee; I also have the honour and privilege of chairing the Procedure Committee. Many of the matters with which the Modernisation Committee is dealing are also part of the responsibility of the Procedure Committee. Wearing my modernisation hat, I am principally concerned about the primacy, the integrity, the sovereignty, the role and the authority of the House of Commons—of this Chamber. What worries me is that the House is being bypassed in so much of what I see going on. I do not wish to make any reference to rulings and utterances that you, Madam Speaker, have delivered from the Chair, but the importance of the Chamber must never be understated.
Many people say that there is too much legislation and never enough time to debate it all. I say from some experience in the House that there is too much legislation and too little debate. We should have more debate. That is why I personally warmly support the proposals in the Modernisation Committee's report that we should have more genuine debates in the House. Whether they are on the Floor of this Chamber, or in the Grand Committee Room—the Commons Committee—is a matter for debate.

Mr. Forth: Given that my hon. Friend shared my view that, usually, very few Members would be in the alternative Chamber, how would that enhance the quality of debate overall in the Palace of Westminster?

Mr. Winterton: I will come to that, so I ask my right hon. Friend to be patient.
I support another proposition that the Modernisation Committee has put forward: there should be more pre-legislative scrutiny. If that takes place, better legislation will come before the House and less time will be spent in Standing Committee, during remaining stages or in the Committee of the whole House. Therefore, certain pluses are coming out of the report.
My right hon. Friend the Member for Bromley and Chislehurst has rightly referred to the attendance in the Chamber. It is something of which I am ashamed. When we are televised and people see just a handful of Members in the House—on either side—people get the wrong impression. I almost wish that I were able to be here, but, as you know, Madam Speaker, my other duties in the House rightly take me elsewhere, whether it is—although it does not meet when the House is sitting—the Modernisation Committee, or the Procedure Committee, some of whose members are in the House and hoping to speak. We meet concurrently with the House and do an important job, although people looking on debates in this Chamber would not appreciate that fact.
I raise a matter that I have raised with the Leader of the House before. There is a problem in Committees in achieving a quorum. On two occasions, we have had to cancel an important Procedure Committee sitting to discuss the procedural consequences of devolution because we could not achieve a quorum of members to enable us to sit. If we have bad attendances in the Chamber and find it difficult to man Committees, clearly, we will need to take account of the problems that will arise because of another Committee, or another sitting in Westminster hall, which will be concurrent with what is going on in the House itself.

Mr. Brady: I wonder whether my hon. Friend would bear it in mind that sittings in Westminster Hall could contribute to the problems of Select Committees in achieving a quorum.

Mr. Winterton: Indeed. That is why I have raised the issue. I have raised it in the Modernisation Committee, through correspondence with the Leader of the House and, for that matter, correspondence with the Whips, of both the Government and Opposition parties. The Leader of the House has taken the matter on board. Clearly, the House will have to take it into account in reaching a decision tonight.
I want to be positive in respect of the role that I play as Chairman of the Procedure Committee. The Committee is sympathetic to the Modernisation Committee's proposal as it provides more time for debates, which all hon. Members may attend. That is particularly pertinent as devolution will necessitate some changes in the way in which the House operates and conducts its business.
One of the problems that the Procedure Committee has had to consider in its inquiry on the procedural consequences of devolution has been the future of Grand Committees, which currently comprise a set of the House's Committees. As many hon. Members will be aware, before devolution, such Committees provided a mechanism whereby hon. Members representing parts of the United Kingdom with distinctive identities—Scotland, Wales and Northern Ireland—could present their views. Now, the new devolved legislatures will themselves be able to make representations to the United Kingdom Government. Therefore—in my view, and that of my Committee—there is no need for such double representation.
None the less, devolution should not mean that there should be no debate at Westminster on matters relating to Scotland or Wales. My Committee and I believe that

many of the matters previously referred to Grand Committees—such as the implications of the Budget for Wales—will remain proper and desirable subjects for debate in the House. However, as our report states, the Procedure Committee was attracted to the principle
"that Members from all parts of the United Kingdom should be able to participate in debates held in the United Kingdom Parliament."
I believe that continuation of Grand Committees would undermine that principle. We therefore propose making some savings—which I hope will enable hon. Members who sat on the Grand Committees to be available elsewhere.
The increased opportunity for debate offered by Westminster Hall means that debates on matters relating to Scotland, Wales or—dare I add it—even England could be taken in a forum in which all hon. Members could participate, be it in the Commons Committee, in Westminster Hall, or the Chamber itself. Indeed, the Procedure Committee was so interested in the proposal that it rushed out its "Second Interim Report on the Procedural Consequences of Devolution", so that the House could have notice of its thinking before any early debate on the subject that we are now debating. Today, the Committee published its full report on the "Procedural Consequences of Devolution".
It is important that we should seize the opportunity offered by Westminster Hall if United Kingdom Members are to have the opportunity to learn from one another's experiences. I wonder how many Labour Members know that, currently, no English Member other than a Minister may participate in the Scottish Grand Committee, and that only five may join the Welsh Grand Committee. Those debates may, in principle, be read after the event, but I should be surprised if they had a wide circulation.
If devolution results in things being done better—as they may be—in Scotland and in Wales, all hon. Members should have the chance to hear about them and to discuss the Scottish or the Welsh experience. Similarly—as I am sure that you, Madam Speaker, will be aware—policies on reserved matters affecting the highlands may have similar effects on remote parts of England and of Wales. Hon. Members from all countries may have an interest in debating those matters.
The Procedure Committee recommended that
"once devolved government is in place and for the period of the experiment with the sittings in Westminster Hall, the Grand Committees be suspended."

Mr. Clive Efford: Will the hon. Gentleman confirm, having participated in the Procedure Committee's discussions on the issue, that Committee members were concerned that no precedence should be given in the new Committee to debates that would previously have been held in Grand Committees, and that those debates should take their place alongside other debates in seeking to use the additional opportunity?

Mr. Winterton: The hon. Gentleman is absolutely right. He also plays an important part in the business of the Procedure Committee. I congratulate him on his regular attendance of the Committee, thereby enabling us to maintain a quorum.
I believe that the House will have to be very careful in taking the decision that it will take today. Some dramatic changes are proposed that may have an unfortunate effect on the integrity, sovereignty, role and authority of the House.
Like the hon. Member for Crewe and Nantwich, I am concerned about the hemicycle. I would have much preferred a similar layout to this Chamber. The cost is estimated at £870,000. I think that it will be much more. It is likely to be close to £1 million. The example of the new parliamentary building across the road shows how contracts can overrun. I am concerned about our ability to find such a large sum at the drop of a hat. I remind the hon. Member for Burnley that the money is being brought forward from 2002-06, when the expenditure would otherwise have been incurred. We are finding a great deal of money to carry out the experiment. I hope that the Leader of the House will assure me that the amount spent during the experiment will be kept to a minimum. Only if the experiment is a success should we proceed with the full expenditure.

Mrs. Beckett: I am not entirely sure what the hon. Gentleman is asking, but he knows the position. It is proposed that work on the Grand Committee Room that was scheduled should be brought forward. Any further expenditure should be kept to a minimum. He will remember that I asked about the need for the additional expenditure. The House authorities have undertaken to see whether it is possible to provide all the funds that would be required within the leeway for this year.

Mr. Winterton: I thank the right hon. Lady for that clarification. I remember her raising the matter and I know that she shares my concern that in the experimental period the expenditure should be kept to a minimum, although we disagreed about the layout in the Grand Committee Room.
I shall consider deeply which way to vote, but I have a nasty feeling that my traditionalism may prevail.

Mr. Keith Darvill: I am in favour of the motion. Since being elected to the House, I have had the privilege of sitting on the Procedure Committee, which has been very active. It is good to follow the hon. Member for Macclesfield (Mr. Winterton), who chairs the Committee.
As well as the procedural consequences of devolution, the Procedure Committee has considered resource accounting and budgeting, which has not been mentioned so far. It is clear from the Committee's detailed examination of the issue that considerable additional information will be available to Select Committees to enable them to examine the finances of the Departments that they shadow.
We have already heard statistics on the number of Select Committee reports that are not considered. With the availability of that additional information, it is even more important that the reports are examined in the Chamber or in Westminster Hall. If not, the considerable work that is undertaken by hon. Members will seem wasted, as will the benefit of the close examination and scrutiny of the Executive that Select Committees provide.
I agree with most of the recommendations. The main benefit that will flow from a positive decision this evening is the additional time that will be made available to debate Select Committee reports. Paragraph 27 of the report says:
we see Westminster Hall as a forum which will provide additional opportunities for select committees.

Many hours are devoted to Select Committees by hon. Members. To debate only 10 per cent. of reports in any one year shows that the House is not functioning properly and not holding the Executive to account. This is not a new matter, as the Liaison Committee underlined the need for further examination of Select Committees in 1997. This theme has developed as the role of Select Committees has evolved.
The British constitution is slow to change. The reform of the House of Lords has been agonisingly slow, and has taken the best part of this century. The evolution of Select Committees has moved at a faster pace. We are at a time of considerable change, with the procedural consequences of devolution and resource accounting and budgeting. Failing to allow Select Committee reports in particular to be examined as they should be means that we are not doing our constituents or ourselves any favours. I believe that not only Select Committees but Green Papers and other matters should be examined.

Mr. Bermingham: Just to prove to the Liberal Democrats that I have read the report, I should point out that one of the problems is that people might say "Object" to Select Committee reports being debated in the new Chamber. It might be as well for the Government to take away that blockage. From experience, Select Committee reports and Green Papers are not debated, and will not be debated, if three people—or whatever the quorum is—ay "Object".

Mr. Darvill: My hon. Friend raises an important point, and the procedures are evolving. If hon. Members do not want the system to work, they can stop it. If so, the trial will not have worked, and it will be for us to come back and consider the matter. I hope that Members will not take those measures to thwart the will of the House, and that the real benefits that can be obtained from this experiment will be delivered.

Mr. Stunell: Could I draw the hon. Gentleman's attention to the fact that the provision to object relates only to Government-proposed business and would not apply to Select Committee reports, meaning that the intervention by the hon. Member for St. Helens, South (Mr. Bermingham) was unfortunately mistaken?

Mr. Darvill: I thank the hon. Gentleman for highlighting that point, and I hope that the House supports the measures tonight.

Mr. William Ross: I am somewhat reluctantly prepared to give this proposal a cautious welcome. One of the reasons for that is that it appears that, by and large, legislation will stay in the Chamber. I am cautious because of a number of proposals in the report, including that we should have a semi-circular arrangement. I thought that we had the perfectly sound principle of cross-Bench seating to allow those who wished to sit on the fence to sit squarely on it. I suppose that the Government, with their majority, will ram this through the House—have done with so many things—ill wind up with that arrangement.
When matters are brought to the House, I often wonder what the real intentions of the Government are. I have been here for a number of years, and I have never yet


seen a Government making changes to the procedures to be helpful to the Opposition or to Back Benchers. I do not think that that is the intention in this case, either.
I am somewhat curious about the type of debate that we may have. Some of us will want to probe, to ask questions and to be more constructive than is sometimes the case across this Chamber, but others will be doing a publicity job for their own area to boost their standing with their constituents. We all understand that that will go on; the question is how on earth we are to keep it under control.
Guillotine motions have been an increasing feature of life in recent years. Does the move to Westminster Hall mean that there will be fewer of those and that there will be more public debate in the main Chamber, allowing all hon. Members to air their concerns, or will all such business move too, giving us an opportunity to speak there that has been denied us here?
The Leader of the House said that she thought that there would be better scrutiny of legislation and of Government. How are the Government to be called to account in the Committee? Will those who take part in the debates be able to send for papers and persons, as in Select Committees?

Mrs. Beckett: I think that there has been a slight misunderstanding, as I did not suggest that the new Committee would provide greater opportunity for scrutiny of legislation as such. I spoke merely of enhancing parliamentary scrutiny as a whole, in that there will be opportunities for hon. Members to hold Ministers to account in debate.

Mr. Ross: I am grateful for that explanation, because it means that whenever we do not get an answer in Westminster Hall, we can bring the matter back here and put pressure on the Government by asking more questions.
The Government clearly believe that the change will not be as popular as the trailers have suggested. The fact that a quorum of three is deemed sufficient says a lot about the importance that we are prepared to attach to the new institution.
I know, and all but the most recent Members should know, that Governments hate debate, as it is very dangerous for them; that is why they always try to restrict it. They have a problem with legislation because they cannot retreat; they have to press on, and the longer the debate goes on, the more likely it is that weaknesses and imperfections will be exposed. We saw the result of that only last week.
We should always look for a longer time scale in legislation. I would much prefer to be in this Chamber. I would like the general public to have time to examine legislation as it goes through the House on a much longer time scale. Time is the vital consideration for the House; it is the enemy of Government, who know that Back Benchers will make use of it. The restriction of time is the weapon that Governments use to get their way before people have properly thought through what they are doing. We should consider how on earth we can extend the opportunities for debate.
The proposal has some advantages for minor parties and for those who want to raise issues that may be minor in the national context but are of local or regional importance. Northern Ireland Members will be glad of the opportunity to have more Northern Ireland business discussed in the precincts of the Palace of Westminster.
Unlike some Opposition Members, I welcome the proposal to move the Wednesday morning debates to Westminster Hall. The loss of the chance for the public to see this place on a Wednesday morning has been a loss to the community at large, and I hope that the morning will be free again, because the more the general public can come here, the better for democracy.
I regret the fact that we do not have the late-night debates that we used to have. That is a great loss to the community as a whole.

Helen Jackson: I am pleased to have had the privilege of being a member of the Modernisation Committee. That is not because the word "modernisation" makes me think, "Oh, great, we can change everything tomorrow", nor is it because—as my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) did not suggest—I am the sort of Member who thinks, "Modernisation? Oh dear. What can I do to prevent any change in what happens in the House?" I believe strongly that it is good for every institution, whether a family, big business or Parliament, to consider how it is fulfilling its role and how it wants to change. I also know from experience that nothing focuses the mind more than changing the furniture, moving to a different room, changing the bedroom that a child sleeps in or changing the room that someone uses as an office. That is why this has been a constructive and interesting debate.
Using the same analogy, the usual excuse given for not changing something is cost. There is money in future budgets for upgrading the Grand Committee Room in Westminster Hall. If the House accepts the proposals before us today, I would be delighted to bring that money forward so that Westminster Hall, which is at the historical heart of this parliamentary building, can be made into a room of which we can be really proud. Some of us had the privilege of seeing it laid out as it would he, and we could also imagine the enhanced lift for the disabled—the current method of getting disabled people up to those rooms is not very dignified. The costs would be minimal. We are spending £250 million on Portcullis house and we are talking about much less than £1 million for a development that would enhance the Houses of Parliament as a whole.
I agree with those hon. Members who have said that what happens in this Chamber is of paramount importance. These proposals can only enhance the Chamber. I agree with the right hon. Member for North—West Hampshire (Sir G. Young) who believes—as you do, Madam Speaker—that ministerial statements should be made to the House and not on Radio 4. These proposals will leave the Chamber free for Ministers to make their statements—[Interruption.] I agree with Opposition Members, who are laughing, that that is the correct approach.
Attendance in the Chamber has been mentioned, but it falls when the Chamber is abused. I find all-night sittings silly, time wasting and bad for the brain. They do nothing to enhance the reputation of the Chamber and a lot of silliness is often spoken during them.

Mrs. Dunwoody: I hope that my hon. Friend will not think that I am being unkind if I say that a lot of silliness is often spoken earlier in the day in the Chamber.

Helen Jackson: A lot of silliness is spoken in many parts of this building all through the day.
I strongly support the early, radical recommendation of the Modernisation Committee that the majority of Bills should be timetabled. I refer hon. Members back to last week, when we talked all night on an issue that aroused strong feelings on all sides. Hardly anyone was listening, and the media were not interested. When the debate was rescheduled in prime time on a timetable motion, good points were made by hon. Members of all parties. It was an excellent debate and, as it happened, the Government won the vote. People were able to listen to the arguments, and the time chosen was appropriate for discussion of an issue that interested everyone in the House. There was no question of poor attendance last Thursday.
It is within our power to examine the way in which we discuss legislation and to ensure that this Chamber is used to discuss key issues in which everyone is interested. The new Chamber in Westminster Hall will release time in which this Chamber can be used better.
I do not want to go over what has been said about the benefits to be gained from the proposals for Westminster Hall. From my time on the former Select Committee on the Environment, I know that discussion of Select Committee reports in this Chamber either happens too late, when the issue concerned has gone off the boil, or does not happen at all.
The extra time that will be allowed for private Members' business means that the expertise that Back Benchers bring from their former professions and lives will be used more effectively. Also, although it may be heresy to some people, I think that it might be appropriate to move the Wednesday morning sittings to Westminster Hall as a pilot experiment. Wednesday is the most popular day for the public to come to Parliament, as Prime Minister's Questions are held on that day. At present there is no opportunity for people to see the Chamber in the morning.
I agree with what has been said about debates on foreign affairs and estimates. However, I agree with paragraph 17 of the report's board of management memorandum, which expresses the hope that use of the second Chamber for Government business will not be ruled out. I shall be interested in whether discussion of some delegated legislation may be more suitably allocated to Westminster Hall.
In addition, some of the early discussions of specialist matters arising from Green Papers may give rise to debates that are wider and better thought out than is possible here, where the lack of available time means that they are squeezed for space. I also want to add my voice to those hon. Members who have endorsed the idea that the Westminster Hall Chamber will be distinctly different. The format for debates will be different, and I welcome that.
Those hon. Members who are worried about whether the new forum will take off are right to ask whether the media will be interested. In the previous Parliament, I spent a lot of time on matters to do with water and the environment. The members of the media interested in those subjects tended to be the environmental correspondents and the specialist media, who did not enjoy the luxury of the facilities extended to the Lobby correspondents.
That may not be popular with the Lobby correspondents, who like to feel that Parliament is about gossip, cut and thrust, and Prime Minister's Question Time—but the specialist media should be given enhanced facilities in the House, and this is an opportunity to provide them. This proposal could be good for Parliament, helping to persuade the public that we are not simply concerned with Prime Minister's Question Time, while the Chamber is otherwise empty. It should show that we are concerned to debate the key issues of the day, that all arguments are heard and that we are not just party hacks. It should show that whatever party we belong to, we are interested in raising arguments, listening to each other and discussing matters.
I hope that Westminster Hall will provide a fresh and responsible approach. The reform is cost effective, brilliantly using a part of the House that embodies the heart of the old parliamentary buildings.

Mr. David Maclean: I listened to the hon. Member for Sheffield, Hillsborough (Helen Jackson) with increasing incredulity. She said that decamping the House of Commons—not a Committee—on certain days to a poky room above the cafeteria off Westminster Hall would somehow enhance the status of the Chamber. Even if that poky room has a £1 million refurbishment, decamping to it will not enhance the status of the House of Commons. I oppose the report because I believe that it will, yet again, diminish the status of the House and of Madam Speaker. There is no need for it.
My incredulity increased when the hon. Lady suggested that if a parallel Chamber met elsewhere, there would somehow he time for Ministers to make statements to the House. Ha! That beggars belief. The diminution of the status of this House has come not from evolutionary change but, over the past two years, from revolutionary change. Prime Minister's Question Time has been arbitrarily changed, without consultation with Madam Speaker. The other place is being destroyed although we have been given no model with which to replace it. Again and again, statements are made outside the House. Today's was another example. All that diminishes the status of this place.
I do not believe that there is any need for a parallel Chamber to debate the issues mentioned. Time is available in this House if we wish to use it. My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) has pointed out that we are rising a day early for the Whitsun recess. There was an attempt to give us an extra week's holiday before the Easter recess, and we took three days of it. Last summer, the recess was one of the longest in history. There is time to debate issues if the House wants to do so.
Fridays have also been reduced and are used purely for private Members' business. If there is an overwhelming demand for Adjournment debates, let hon. Members slot in 10 of them on a Friday. At half an hour each, we could easily do so.

Mrs. Beckett: I have forborne to correct the many Conservative Members who have referred to the changes on Fridays. However, I recall that those changes resulted from the Jopling report, under the previous Government. They were nothing to do with the present Government.

Mr. Maclean: I accept that those changes were consequences of the Jopling report, but not everything in that report was to the benefit of the House. If there is a demand for more Adjournment debates, let them be held on a Friday, or let them continue to be held in the Chamber on a Wednesday morning. Let us not detract even further from the status of the House.
I will share a little anecdote with the House, which I think is instructive. When I was made an Environment Minister in 1992, we held the presidency of the European Union. We held an informal ministerial meeting here. We arranged a nice hotel to meet all the Ministers, which was the normal practice. I was waiting on the steps to greet the German Minister—one of the most important—who turned up in the British Government ministerial Rover Sterling, which we had allocated to him. The hotel flunkies jumped to help him with his bags. At that moment, a fleet of Daimlers rolled up. The hotel flunkies dropped the German Minister's bags, rushed to the Daimlers and treated the occupants like royalty. Of course, they were the civil servants from the Commission, who had decided to hire their own fleet. The point is this—as someone in the hotel said when we protested about the treatment of the German Minister—"If you drive around like royalty, you'll be treated like royalty."
You are the Speaker of this House of Commons, Madam Speaker. If we move to a Committee room at the other side of Westminster Hall not to hold a Committee there but to hold what is effectively a sitting of the House of Commons, and it is chaired not by Madam Speaker but by a Deputy Speaker and by other Assistant Speakers, we will again be diminishing the status of the Chamber.

Dr. Starkey: Does the right hon. Gentleman agree that the logic of his statement is that when Madam Speaker is, regrettably, unable to be in charge of the Chamber and one of her deputies is substituting, the status of this Chamber is somehow diminished?

Mr. Maclean: That was not my point at all. This is the Chamber—[Interruption.] My point is that if the House of Commons is no longer meeting in this Chamber, which is adequate to hold most of the Members of the House, but decides to move to a Committee Room above the cafeteria on the other side of Westminster Hall, where Madam Speaker will never be in the Chair—at best it will

be a Deputy Speaker—that will be perceived by the media and others as a much lesser form of House of Commons, as indeed it will be because, at most, 51 Members—

Mr. Nicholas Winterton: I am a little concerned about my right hon. Friend's derogatory remarks because I might be one of those hon. Members in the Chair.

Mr. Maclean: My hon. Friend has many talents and qualities, but he is not the Speaker of the House of Commons. Our debates in this Chamber can be presided over by the Speaker; our debates in the Room above the café will be presided over by, at most, a Deputy Speaker. That in itself is another small but significant diminution in the status of this Chamber.
Comments have been made about the furniture. Listening to some hon. Ladies on the Labour Benches telling us that the furniture, the design of the room and the colours are important, I thought that we were about to have another lecture on interior decorating and design.
The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) made an excellent speech. She proved that there can be complete agreement across the Floor of this House. I agree with everything that the hon. Lady said, both in her speech and in her interventions. We did not need to sit in some cosy hemicycle to come to that agreement. The hon. Member for East Londonderry (Mr. Ross) talked about a semi-circle, but it is a hemicycle and there is a big difference, I understand.
There is no need for this proposal because there is ample time if we want it. We must puncture a few myths. Hon. Members say that there is great demand for Select Committee reports to be debated. Let us be honest. Who are we kidding? The only demand comes from some of the members of the Select Committees, who want to take over another Chamber of the House to debate the same report that they have spent weeks discussing in the first place.
Select Committee reports are important, not because they will be debated three weeks, six weeks or six months later but because, on the day of publication—if they have not been leaked—the Committees can hold the Government to account. At that stage, they can cause the Government some hurt or injury, put them on the back foot and make them defend themselves. That is when Select Committee reports matter, not when they are debated in the room above the café six months later.
It is clear from what Labour Members said that they regard endless Adjournment debates as a major role for the new Chamber. Let us be honest again: Adjournment debates do not hold the Government to account. No Minister is terrified of them. I cannot recall ever swotting up for days worrying about an Adjournment debate; no one in this Government sweats about them either. Adjournment debates are loved by all Members, and we put in for them for one good reason: they are another justification for press releases because we can say that we raised an issue on the Floor of the House of Commons and give out a copy of our very important speeches to an almost packed House.
Let us be honest. Our press releases are based on our questions and speeches. As we cannot get into many of the important debates, Adjournment debates are another legitimate avenue. If hon. Members want endless Adjournment debates, I say once again and in conclusion,


let them be held on Friday or Wednesday morning, but do not set up yet another Chamber that is supposed to be this House in miniature on the other side of Westminster Hall.
I am sorry, Madam Speaker: when I used the words "in conclusion", I told a slight untruth. My final point concerns the furniture. I notice—I think in schematic 5 of the hemicycle that we are urged to agree to tonight—that there is provision for a pulpit. We now know where the Prime Minister will sit.

Mr. Tony McNulty: I draw the attention of the right hon. Member for Penrith and The Border (Mr. Maclean) to paragraph 50. Should he venture into Westminster Hall, he will find that the Deputy Speaker and his colleagues have the power to discontinue a speech on the grounds of tedious repetition and irrelevance. Perhaps he should stay out altogether.
I have a few points, but I will not speak fully in favour of the report. This evening has been an example of how badly the House of Commons does these things. The hon. Member for Macclesfield (Mr. Winterton) eloquently discussed the Procedure Committee's report on the consequences of devolution. At the same time, we had the Modernisation Committee's report on finding extra time above the police café in Westminster Hall. It would have made more sense if both Committees had met so that the Procedure Committee could have given its views on the consequences of devolution and the Modernisation Committee its views on finding more time for debate. A joint report could have been produced for the House, rather than discussing the Modernisation Committee report—I call it the Tinkering Committee—and then discussing the Procedure Committee report. That is daft.
I do not like members of the Modernisation Committee who wax lyrical with hyperbole and revolutionary fervour about what is nothing more than tinkering. I do not like many aspects of the proposals. I do not know how to overcome it but I do not like the fact that only 51 Members can get into the Room. What happens if 53 want to come? Will the Westminster Hall sittings be stopped and brought back to the main Chamber? The right hon. Member for Bromley and Chislehurst (Mr. Forth) probably has at least 50 acquaintances, if not friends, whom he could persuade to fill that Chamber every now and then to avoid debate. The modernisation debate is not served by hyperbole and revolutionary fervour when we are talking only of a couple more hours of debate elsewhere.
I fundamentally disagree with the report about the House becoming a museum again on Wednesdays. Like other hon. Members, I take tours round, but above all, this must be a working Chamber. Its work must be paramount. I am disappointed that Wednesday mornings are excluded. When the private Members' Bill process is reformed, I should like such proceedings to be held on Wednesdays so that some of my northern comrades and Opposition colleagues could pop along and see what the process is all about. I come into the House every Friday, as do some other Members.
The proposals are not revolutionary. It is a shame that the Procedure Committee and the Modernisation Committee did not hold a joint meeting. We need to address the issue of furniture. I am not a hemispheric—

[Interruption.] I am hemispheric, but I am not a hemispheric. The notion that, if we arrange the furniture, the politics will change—that the adversarial will go and consensus will arrive—is absolute nonsense. Hon. Members should consider the Westminster city council chamber or the Harrow council chamber. I was a member of Harrow council and I made pretty sure that there was no such thing as consensus, unless, as leader of the Labour group, the consensus was what the Labour group said it should be. In that sense, I accept consensus.
Let us not run a mile. The ideas are fine. The idea that there should be another Chamber in order that we can have more discussion is fine. If the amendments had been tabled by a Member whom I preferred, I might have supported them; I cannot, in all conscience, go into the Lobby to support an amendment tabled by the right hon. Member for Bromley and Chislehurst. However, as a modernising party or a modernising Chamber, we should not run away with the notion that the proposals are revolutionary. For God's sake, will the Modernisation Committee start being a modernising Committee and stop being a tinkering Committee that goes along at a snail's pace? The Committee is not even Fabian; it goes along at a snail's pace—at a dead snail's pace. Let us modernise properly, but scrap the hyperbole.

Mr. Graham Brady: I am pleased to follow the hon. Member for Harrow, East (Mr. McNulty). I nearly spoiled matters by introducing a note of consensus, even though that is not my preference in politics either. The hon. Gentleman saved me from that, however. I oppose the motion, but support the amendment tabled by my right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) and my hon. Friend the Member for Macclesfield (Mr. Winterton)—not only because the amendment could have no finer pedigree, but because any Members who take seriously the role of this Chamber must accept the arguments that have been advanced for the amendment. Those arguments include the following: that the meetings in Westminster Hall must be considered to be a Committee of the House and not in any way equivalent to what goes on in this Chamber; that we should hold Wednesday debates in this Chamber and that their removal would diminish the value of what goes on here; and that the seating in the new Committee Room should be on the same model as the seating in this Chamber. I have never disagreed with Labour Members simply because they sit opposite me—nor have I necessarily agreed with Members on the Opposition Benches because they sit on the same Benches as I do. Some of my hon. Friends have made the same point. However, the crucial point is that the seating arrangement matters. That is why it is essential that we retain the existing plan. The reason is that it assists scrutiny and makes it less likely that there will be cover-up and fudge. It makes proper questioning and debate more likely.
Most important, I support the amendments tabled by my right hon. Friend the Member for Bromley and Chislehurst that relate to the quorum. To suggest that there is a huge demand for sittings in Westminster Hall when the quorum is to be fixed at three gives the lie to the whole proposal.

Mr. Pike: In this Chamber, the quorum is only invoked when a vote is called. There is no stated quorum, so the quorum is often only three—or even less.

Mr. Brady: I am well aware of that point. I am grateful to the hon. Gentleman for raising the matter. The proceedings in this Chamber might be improved if we had a quorum. The point demonstrates the problem in terms of the status of what we do and the attention that is paid to it. The issue is more about the quality of our proceedings and the genuine, intrinsic interest of debates—which sometimes draw only a small number of Members—than about the amount of time in which we have to deal with business.
The role of Select Committees has been discussed by several hon. Members—including the hon. Member for Burnley (Mr. Pike). It has been pointed out that many of those Committees have difficulty in achieving a quorum for their meetings. Again, that demonstrates the fact that Members do not always bother to turn up to debate important matters or to attend important meetings. In considering the new Committee in Westminster Hall, we are also led to the inescapable conclusion that there will be even more difficulties for Select Committees, which, in many cases, are struggling to achieve a quorum, when the limited number of occasions on which they can currently meet will conflict further with sittings of this House. That will cause significant problems for the more active Members of Parliament.
Some have suggested that the new Committee might serve as some sort of job creation scheme for Labour Members who currently have little to do, but I would counter that by arguing that many hon. Members who currently do rather a lot will find it impossible to participate fully in the additional work. Those who are involved in Standing Committees and Select Committees might want to participate in some of the meetings in Westminster Hall, but they will be unable to do so.
It being three hours after the commencement of proceedings on the motion, MADAM SPEAKER put the Questions necessary to dispose of those proceedings, pursuant to Order [21 May.]
Amendment proposed: in line 3, at end add:
"except for paragraphs 17 and 24, and considers that the new sittings should be known as the Commons Committee; that the Wednesday morning sitting devoted to private members' business should not be transferred to Westminster Hall; and that the seating plan to be adopted should be as set out in Appendix 2 of the Report.".—[Mr. Forth.]
Question put, That the amendment be made:—
The House proceeded to a Division—

Mr. Robathan: On a point of order, Madam Speaker. We were categorically assured at the start of the debate—I believe that you were present—that this was not a payroll vote and that Government Members were not whipped. Is it in order for Government Whips to act as Tellers on the vote?

Madam Speaker: What Government Whips do is nothing to do with me. Hon. Members are free to use whichever Lobby they want—indeed, I am honoured because several hon. Members have, as they passed by the Chair, asked which way they should vote. That has never happened to me before.

The House having divided: Ayes 43, Noes 144.

Division No. 196]
[10.11 pm


AYES


Amess, David
Lidington, David


Barnes, Harry
McIntosh, Miss Anne


Bell, Martin (Tatton)
Mawhinney, Rt Hon Sir Brian


Bennett, Andrew F
Nicholls, Patrick


Blunt, Crispin
Öpik, Lembit


Brady, Graham
Pickles, Eric


Burnett, John
Randall, John


Clwyd, Ann
Robathan, Andrew


Colvin, Michael
Ross, William (E Lond'y)


Davis, Rt Hon David (Haltemprice
Smith, Sir Robert (W Ab'd'ns)


& Howden)
Smyth, Rev Martin (Belfast S)


Donohoe, Brian H
Swayne, Desmond


Duncan Smith, Iain
Wardle, Charles 


Dunwoody, Mrs Gwyneth
Waterson, Nigel


Flight, Howard
Webb, Steve


Fox, Dr Liam
Wells, Bowen


Fraser, Christopher
Whittingdale, John


Gibb, Nick
Widdecombe, Rt Hon Miss Ann


Gill, Christopher
Winterton, Mrs Ann (Congleton)


Gillan, Mrs Cheryl
Winterton, Nicholas (Macclesfield)


Green, Damian



Hammond, Philip
Tellers for the Ayes:


Howarth, Gerald (Aldershot)
Mr. Eric Forth and


Leigh, Edward
Mr. David Maclean.




NOES


Ainsworth, Robert (Cov'try NE)
Eagle, Maria (L'pool Garston)


Allan, Richard
Efford, Clive


Allen, Graham
Etherington, Bill


Atkins, Charlotte
Fearn, Ronnie


Baker, Norman
Fitzpatrick, Jim


Ballard, Jackie
Fitzsimons, Lorna


Beckett, Rt Hon Mrs Margaret
Foster, Michael Jabez (Hastings)


Begg, Miss Anne
Gapes, Mike


Beith, Rt Hon A J
George, Bruce (Walsall S)


Betts, Clive
Gilroy, Mrs Linda


Blackman, Liz
Goggins, Paul


Blears, Ms Hazel
Griffiths, Jane (Reading E)


Bradley, Keith (Withington)
Gunnell, John


Bradshaw, Ben
Hall, Mike (Weaver Vale)


Breed, Colin
Hall, Patrick (Bedford)


Bruce, Malcolm (Gordon)
Hancock, Mike


Burden, Richard
Hanson, David


Caborn, Rt Hon Richard
Harvey, Nick


Campbell, Mrs Anne (C'bridge)
Heath, David (Somerton & Frome)


Campbell, Rt Hon Menzies 
Heppell, John


(NE Fife)
Hope, Phil


Campbell—Savours, Dale
Howarth, George (Knowsley N)


Caplin, Ivor
Hunghes, Ms Beverley Stretford)


Clark, Rt Hon Dr David (S Shields)
Hughes, Simon (Southwark N)


Clark, Dr Lynda
Hutton, John


(Edinburgh Pentlands)
Iddon, Dr Brian


Clarke, Charles (Norwich S)
Illsley, Eric


Clarke, Eric (Midlothian)
Jackson, Helen (Hillsborough)


Clelland, David
Jamieson, David


Coaker, Vernon
Jenkins, Brian


Cohen, Harry
Johnson, Alan (Hill W & Hessle)


Connarty, Michael
Johnson, Miss Melanie


Cotter, Brian
(Welwyn Hatfield)


Cranston, Ross
Jones, Ms Jenny 


Cunliffe, Lawrence
(Wolverh'ton SW)


Curtis-Thomas, Mrs Claire
Keeble, Ms Sally


Darvill, Keith
Kemp, Fraser


Davey, Edward (Kingston)
King, Ms Oona (Bethnal Green)


Davey, Valerie (Bristol W)
Ladyman, Dr Stephen


Dawson, Hilton
Leslie, Christopher


Dean, Mrs Janet
Levitt, Tom


Dowd, Jim
Linton, Martin


Drew, David
Livsey, Richard


Eagle, Angela (Wallasey)
Lloyd, Tony (Manchester C)






Lock, David
Sheerman, Barry


McAvoy, Thomas
Short, Rt Hon Clare


Mackinlay, Andrew
Simpson, Alan (Nottingham S)


McNamara, Kevin
Smith, Jacqui (Redditch)


Mactaggart, Fiona
Soley, Clive


McWaiter, Tony
Starkey, Dr Phyllis


Mahon, Mrs Alice
Stoate, Dr Howard


Marsden, Paul (Shrewsbury)
Stuart, Ms Gisela


Marshall—Andrews, Robert
Stunell, Andrew


Maxton, John
Taylor, Rt Hon Mrs Ann


Merron, Gillian
(Dewsbury)


Michie, Bill (Shef'ld Heeley)
Taylor, David (NW Leics)


Michie, Mrs Ray (Argyll & Bute)
Taylor, Matthew (Truro)



Moffatt, Laura
Thomas, Gareth R (Harrow W)


Moran, Ms Margaret
Tipping, Paddy


Naysmith, Dr Doug
Todd, Mark


Oaten, Mark
Tong, Dr Jenny


Olner, Bill
Touhig, Don


Pickthall, Colin
Turner, Dennis (Wolverh'ton SE)


Pike, Peter L
Turner, Dr George (NW Norfolk)


Pond, Chris
Twigg, Stephen (Enfield)


Pope, Greg
Tyler, Paul


Prentice, Ms Bridget (Lewisham E)
Walley, Ms Joan


Prescott, Rt Hon John
Watts, David


Purchase, Ken
Wills, Phil


Quinn, Lawrie
Winterton, Ms Rosie (Doncaster C)


Rendel, David
Wright, Dr Tony (Cannock)


Rowlands, Ted
Young, Rt Hon Sir George


Russell, Bob (Colchester)



Salter, Martin
Tellers for the Noes:


Sanders, Adrian 
Mr. Keith Hill and


Savidge, Malcolm
Mr. Kevin Hughes.

Question accordingly negatived.

Main Question Put:—

The Houses divided: Ayes 145, Noes 36.

Division No.197]
10.24 pm


AYES


Ainsworth, Robert (Cov'try NE)
Davey, Edward (Kingston)


Allan, Richard
Davey, Valerie (Bristol W)


Allen, Graham
Dawson, Hilton


Atkins, Charlotte
Dean, Mrs Janet


Baker, Norman
Dismore, Andrew


Ballard, Jackie
Donohoe, Brian H


Beckett, Rt Hon Mrs Margaret
Dowd, Jim


Begg, Miss Anne
Drew, David


Beith, Rt Hon A J
Eagle, Angela (Wallasey)


Betts, Clive
Eagle, Maria (L'Pool Garston)


Blackman, Liz
Efford, Clive


Blears, Ms Hazel
Emery, Rt Hon Sir Peter


Bradley, Keith (Withington)
Etherington, Bill


Bradshaw, Ben
Fearn, Ronnie


Breed, Colin
Fitzpatrick, Jim


Bruce, Malcolm (Gordon)
Fitzsimons, Lorna


Burden, Richard
Foster, Michael, Jabez (Hastings)


Caborn, Rt Hon Richard
Gapes, Mike


Campbell, Mrs Anne (C'bridge)
George, Bruce (Walsall S)


Campbell, Rt Hon Menzies
Gilroy, Mrs Linda


(NE Fife)
Goggins, Paul


Campbell,-Savours, Dale
Griffiths, Jane (Reading E)


Caplin, Ivor
Gunnell, John


Clark, Rt Hon Dr David (S Shields)
Hall, Mike (Weaver Vale)


Clarke, Charles (Norwich S)
Hall, Patrick (Bedford)


Clarke, Eric (Midlothian)
Hancock, Mike


Clelland, David
Hanson, David


Coaker, Vernon
Harvey, Nick


Cohen, Harry
Heath, David (Somerton & Frome)


Connarty, Michael
Heppell, John


Cotter, Brian
Hope, Phill


Cranston, Ross
Howarth, George (Knowsley N)


Curtis-Thomas, Mrs Claire
Hughes, Ms Beverley (Stretford)


Darvill, Keith
Hughes, Simon (Southwark N)





Hutton, John 
Pope, Greg


Iddon, Dr Brian
Prentice, Ms Bridget (Lewisham M)


Illsley, Eric
Prescott, Rt Hon John


Jackson, Helen (Hillsborough)
Purchase, Ken


Jamieson, David
Quinn, Lewrie


Jenkins, Brian
Rendel, David


Johnson, Alan (Hull W & Hessle)
Rowlands, Ted



Johnson, Miss Melanie
Russell, Bob (Colchester)


(Welwyn Hatfield)
Salter, Martin


Jones, Ms Jenny
Sanders, Adrian


(Wolverh'ton SW)
Savidge, Malcolm


Keeble, Ms Sally
Sheerman, Barry


Kemp, Fraser
Simpson, Alan(Nottingham S)


King, Ms Oona (Bethnal Green)
Smith, Jacqui (Redditch)


Ladyman, Dr Stephen
Soley, Clive


Leslie, Christopher
Starkey, Dr Phyllis


Levitt, Tom
Stoate, Dr Howard


Linton, Martin
Stuart, Ms Gisela


Livsey, Richard
Stunell, Andrew


Lloyd, Tony (Manchester C)
Taylor, Rt Hon Mrs Ann


Lock, David
(Dewsbury)


McAvoy, Thomas
Taylor, David (NW Leics)


Mackinlay, Andrew
Thomas, Gareth, R (Harrow W)


McNamara, Kevin
Tipping, Paddy


McNulty, Tony
Todd, Mark


Mactaggart, Fiona
Tonge, Dr Jenny


McWalter, Tony
Touhig, Don


Mahon, Mrs Alice
Turner, Dennis (Wolverh'ton SE)


Marsden, Paul (Shrewsbury)
Turner, Dr George (NW Norfolk)


Marshall, Jim (Leicester S)
Twigg, Derek (Halton)


Maxton, John
Twigg, Stephen (Enfield)


Merron, Gillian
Tyler, Paul


Michie, Bill (Shef'ld Heeley)
Walley, Ms Joan


Moffatt, Laura
Watts, David


Moran, Ms Margaret
Webb, Steve


Mullin, Chris
Willis, Phil


Naysmith, Dr Doug
Winterton, Ms Rosie (Doncaster C)


Oaten, Mark
Wright, Dr Tony (Cannock)


Olner, Bill
Young, Rt Hon Sir George


Pickthall, Colin
Tellers for the Ayes:


Pike, Peter L
Mr. Keith Hill and


Pond, Chris
Mr. Kevin Hughes.




NOES


Amess, David
Mawhinney, Rt Hon Sir Brian


Barnes, Harry
Michie, Mrs Ray (Argyll & Bute)


Bell, Martin (Tatton)
Öpik. Lembit


Blunt, Crispin
Plaskitt, James


Brady, Graham
Randall, John


Colvin, Michael
Robathan, Andrew


Davis, Rt Hon David (Haltemprice
Smith, Sir Robert (W Ab'd'ns)


& Howden)
Stanley, Rt Hon Sir John


Flight, Howard
Swayne, Desmond


Fox, Dr Liam
Taylor, John M (Solihull)


Fraser, Christopher
Taylore, Matthew (Truro)


Gibb, Nick
Wardle, Charles


Gill, Christopher
Waterson, Nigel


Gillen, Mrs Cheryl
Whittingdale, John


Green, Damian
Widdecombe, Rt Hon Miss Ann


Hammond, Philip
Winterton, Mrs Ann (Congleton)


Howarth, Gerald (Aldershot)
Winterton, Nicholas (Macclesfield)


Leigh, Edward
Tellers for the Noes:


Lidington, David
Mr. Eric Forth and


McIntosh, Miss Anne
Mr. David Maclean.

Question accordingly agreed to.

Resolved,

That this House approves the Second Report from the Select Committee on Modernisation of the House of Commons on Sittings of the House in Westminster Hall (House of Commons Paper No. 194).

Motion made, and Question put forthwith, pursuant to Order [21 May]:

That in the next Session of Parliament the Standing Orders and practice of the House shall have effect subject to the modifications set out below:

(1) On days on which the House shall sit there shall be a sitting in Westminster Hall—

(a) on Tuesdays between ten o'clock and one o'clock;
(b) on Wednesdays between half-past nine o'clock and two o'clock; and
(c) on Thursdays beginning at half-past two o'clock and continuing for up to three hours (and in calculating that period no account shall be taken of any period during which the sitting may be suspended owing to a division being called in the House or a committee of the whole House).

(2) Any Member of the House may take part in a sitting in Westminster Hall.
(3) Subject to paragraph (12) below, the business taken at any sitting in Westminster Hall shall be such as the Chairman of Ways and Means shall appoint.
(4) The Chairman of Ways and Means or a Deputy Chairman shall take the chair in Westminster Hall as Deputy Speaker; and the House may appoint not more than four other members of the Chairmen's Panel to sit in Westminster Hall as Deputy Speaker.
(5) Any order made or resolution come to at a sitting in Westminster Hall (other than a resolution to adjourn) shall be reported to the House by the Deputy Speaker and shall be deemed to be an order or resolution of the House.
(6) If a motion be made by a Minister of the Crown that an order of the day be proceeded with at a sitting in Westminster Hall, the question thereon shall be put forthwith, but such motion may be made only with the leave of the House and may not be made on a Friday.
(7) The quorum at a sitting in Westminster Hall shall be three.
(8) If at a sitting in Westminster Hall the opinion of the Deputy Speaker as to the decision of a question (other than a question for adjournment) is challenged, that question shall not be decided, and the Deputy Speaker shall report to the House accordingly; and any such question shall be put forthwith upon a motion being made in the House.
(9) If any business other than a motion for adjournment is under consideration at a sitting in Westminster Hall, and not fewer than six Members rise in their places and signify their objection to further proceeding, that business shall not be further proceeded with in Westminster Hall, and the Deputy Speaker shall report to the House accordingly, and any order under paragraph (6) above relating thereto shall be discharged.
(10) At the end of each sitting in Westminster Hall, unless a question for adjournment has previously been agreed to, the Deputy Speaker shall adjourn the sitting without putting any question; and proceedings on any business which has been entered upon but not disposed of shall lapse.
(11) The provisions of Standing Orders No. 29 (Powers of chair to propose question), No. 36 (Closure of debate), No. 37 (Majority for closure or proposal of question), No. 38 (Procedure on divisions), No. 39 (Voting), No. 40 (Division unnecessarily claimed), No. 41 (Quorum), No. 43 (Disorderly conduct), No. 44 (Order in debate), No. 45 (Members suspended, &c. to withdraw from precincts), No. 45A (Suspension of salary of Members suspended) and No. 163 (Motions to sit in private) shall not apply to sittings in Westminster Hall.
(12) The House shall meet on Wednesdays at half-past two o'clock, and paragraphs (1) and (2) of Standing Order No. 9 (Sittings of the House) shall have effect on Wednesdays; and Standing Order No. 10 (Wednesday sittings), so far as it relates to business taken before two o'clock, shall apply only to sitting in Westminster Hall, and shall have effect as if paragraph (3) were omitted.

The House divided: Ayes 132, Noes 26.

Division No. 198]
[10.39 pm


AYES


Ainsworth, Robert (Cov'try NE)
Jones, Ms Jenny


Allan, Richard
(Wolverh'ton SW)


Allen, Graham
Keeble, Ms Sally


Atkins, Charlotte
Kemp, Fraser


Baker, Norman
King, Ms Oona


Ballard, Jackie
(Bethnal Green)


Beckett, Rt Hon Mrs Margaret
Ladyman, Dr Stephen


Begg, Miss Anne
Leslie, Christopher


Beith, Rt Hon A J
Levitt, Tom


Betts, Clive
Linton, Martin


Blears, Ms Hazel
Livsey, Richard


Bradley, Keith (Withington)
Lloyd, Tony (Manchester C) 


Bradshaw, Ben
McAvoy, Thomas


Breed, Colin
Mackinlay, Andrew


Bruce, Malcolm (Gordon)
McNulty, Tony


Burden, Richard
Mactaggart, Fiona


Burnett, John
McWalter, Tony


Caborn, Rt Hon Richard
Mahon, Mrs Alice


Campbell, Mrs Anne (C'bridge)
Marsden, Paul (Shrewsbury)


Campbell, Rt Hon Menzies
Maxton, John


(NE Fife)
Merron, Gillian


Caplin Ivor
Michie, Bill (Shef'ld Heeley)


Clark, Rt Hon Dr David (S Shields)
Moran, Ms Margaret


Clark, Dr Lynda
Mullin, Chris


(Edinburgh Pentlands)
Mullin, Chris


Clarke, Charles (Norwich S)
Naysmith, Dr Doug


Clarke, Eric (Midlothian)
Oaten, Mark


Clelland, David
Olner, Bill


Coaker, Vernon
Pickthall, Colin


Cohen, Harry
Pike, Peter L


Connarty, Michael
Pond, Chris


Cotter, Brian
Pope, Greg


Darvill, Keith
Prentice, Ms Bridget


Davey, Edward (Kingston)
(Lewisham E)


Davey, Valerie (Britol W)
Purchase, Ken


Dawson, Hilton
Quinn, Lawrie


Dismore, Andrew
Rendel, David


Donohoe, Brian H
Russell, Bob (Colchester)


Dowd, Jim
Salter, Martin


Drew, David
Sanders, Adrian


Eagle, Angela (Wallasey)
Savidge, Malcolm


Eagle, Maria (L'pool Garston)
Sheerman, Barry


Efford, Clive
Simpson, Alan (Nottingham S)


Emery, Rt Hon Sir Peter
Smith, Jacqui (Redditch)


Etherington, Bill
Soley, Clive


Fearn, Ronnie
Starkey, Dr Phyllis


Fitzpatrick, Jim
Stotate, Dr Howard


Fitzsimons, Lorna
Stringer, Graham


Foster, Michael Jabez (Hastings)
Stuart, Ms Gisela


Gapes, Mike
Stunell, Andrew


George, Bruce (Walsall S)
Taylor, Rt Hon Mrs Ann


Gilroy, Mrs Linda
(Dewsbury)


Goggins, Paul
Taylor, David (NW Leics)


Griffiths, Jane (Reading E)
Thomas, Gareth R (Harrow W)


Hall, Mike (Weaver Vale)
Tipping, Paddy


Hall, Patrick (Bedford)
Todd, Mark


Hancock, Mike
Tonge, Dr Jenny


Harvey, Nick
Touhig, Don


Heath, David (Somerton & Frome)
Turner, Dennis (Wolverh'ton SE)


Heppell, John
Turner, Dr George (NW Norfolk)


Howarth, George (Knowsley N)
Twigg, Derek (Halton)


Hughes, Ms Beverley (Stretford)
Twigg Stephen (Enfield)


Hughes, Kevin (Doncaster N)
Tyler, Paul


Hughes, Simon (Southwark N)
Watts, David


Hutton, John
Webb, Steve


Iddon, Dr Brian 
Willis, Phil


Illsley, Eric
Wright, Dr Tony (Cannock)


Jackson, Helen (Hillsborough)
Young, Rt Hon Sir George


Jamieson, David



Jenkins, Brian
Tellers for the Ayes:


Johnson, Miss Melanie
Mr. David Hanson and


(Welwyn Hatfield)
Mr. Keith Hill.






NOES


Amess, David
McIntosh, Miss Anne


Barnes, Harry
Öpik, Lembit


Bell, Martin (Tatton)
Randall, John


Blunt, Crispin
Stanley, Rt Hon Sir John


Brady, Graham
Swayne, Desmond


Duncan Smith, Iain
Wardle, Charles


Fox, Dr Liam
Waterson, Nigel


Fraser, Christopher
Whittingdale, John


Gibb, Nick
Widdecombe, Rt Hon Miss Ann


Gill, Christopher
Winterton, Mrs Ann (Congleton)


Gillan, Mrs Cheryl
Winterton, Nicholas (Macclesfield) 


Hammond, Philip



Howarth, Gerald (Aldershot)
Tellers for the Noes:


Leigh, Edward
Mr. Eric Forth and


Lidington, David
Mr. David Maclean.

Question accordingly agreed to.

Orders of the Day — Business of the House

Motion made, and Question put,

That, at the sitting on Wednesday 26th May—

(1) the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the names of Margaret Beckett or Mrs. Marion Roe relating to—

(a) the First Report from the Administration Committee, on the Proposal to Re-open the Line of Route during the Summer Adjournment (HC 394), not later than two hours after the Motion has been entered upon;
(b) Members' Travel to EU Institutions not later than one hour after the Motion has been entered upon; and
(c) Financial Assistance to Opposition Parties not later than one and a half hours after the Motion has been entered upon;

and the last foregoing Motion may be entered upon and proceeded with, though opposed, after Ten o'clock; and

(2) the Motion in the name of Margaret Beckett relating to Select Committees (Quorum) may be entered upon and proceeded with, though opposed, after Ten o'clock.—[Mr. Clelland.]

Hon. Members: Object.

Orders of the Day — Nursing Care (Eastbourne Hospital)

Motion made, and Question proposed, That this House do now adjourn.— [Mr. Clelland.]

Mr. Nigel Waterson: I am delighted to have this opportunity to highlight the concerns of many of my constituents. Let me begin by paying a warm tribute to the nurses, doctors and other staff who work at Eastbourne district general hospital. Their commitment to patient care, their expertise and their sheer hard work are commented upon by almost everyone who visits the hospital, whether as a patient or in any other capacity.
Although I am raising some genuine concerns this evening, they should in no way be allowed to overshadow the excellent work of the DGH, to undermine staff morale or to cause apprehension among those who may be undergoing or awaiting treatment there.
I want to touch on two specific cases, both tragic. Mrs. Marjorie Dyer was admitted to the DGH in October 1998 after collapsing at home. On 18 October, another patient alerted nursing staff to the fact that Mrs. Dyer was in difficulties—she was choking on a sandwich. First aid was given. A nurse obtained medical records—but, tragically, those relating to another patient. The records said that she was not for resuscitation. The cardiac arrest procedure was not implemented. Other attempts to revive her proved unsuccessful, and she sadly died.
Another incident, which occurred in March 1998, attracted even more local publicity following the recent inquest. It concerned Mrs. Pauline Freeman, who went into the DGH for a hysterectomy. This is a major, but routine, operation. In the normal way, it should certainly not be life threatening—especially for a healthy woman like Mrs. Freeman.
While she was recovering from her operation, a ligature used to tie a main artery slipped. As a result, she haemorrhaged badly, and later suffered a fatal heart attack. It emerged at the post mortem that there were 4,000 ml of blood in her peritoneal cavity. Expert evidence stated that that could have taken up to four hours to accumulate.
At the time of her death, Mrs. Freeman was in a ward of 35 patients who were being looked after by just one registered nurse, with two nursing auxiliaries and a health care assistant. Her consultant gynaecologist—acting as an expert witness at the inquest—stated that, in his opinion, the ward was understaffed, and that more frequent observations of Mrs. Freeman could have identified the problem earlier.
There seems to have been no proper care plan in place for Mrs. Freeman, post her operation. Instead of being observed every half-hour—as was thought appropriate by the expert evidence—she was observed only, at most, every two hours, and the decision was made to reduce the frequency to every four hours. An expert nursing consultant told the inquest that, in her view, staffing levels were too low. The obvious conclusion is that more nurses would have meant more frequent observations, but that is not accepted by the hospital.

Mr. Charles Wardle: I am grateful to my hon. Friend, and I know how hard he works in the interest of his constituents. He referred to the


terrible tragedy of Mrs. Pauline Freeman, a constituent of mine who died last year in the DGH after a hysterectomy. The House will appreciate how devastated her husband, Roy Freeman, and her family have been by the suddenness and the appalling circumstances of her death.
After meeting Mr. Freeman and listening to his account of his painful experience and of his family's sense of total shock and loss, I was able to speak to the chairman of the NHS executive south-east and to the Secretary of State for Health and to communicate with the chairman of the local health authority, all of whom, I am sure, appreciate Mr. Freeman's feelings. I believe that they are trying to help.
I know that my hon. Friend is working closely with the hospital trust. It may be helpful if I tell the House briefly what Mr. Freeman wants as an enduring tribute to his wife. He—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I feel for the hon. Gentleman—it is a very tragic situation—but the rules of the House do not allow an intervention to go on for so long, and I will have to stop him.

Mr. Waterson: I know that my hon. Friend has been in contact with Mr. Freeman and has passed on his views to the authorities, and in particular to the Secretary of State for Health, and I am sure that he will continue to do what he can to look after his constituent in this time of great need.
The trust has maintained that the decision to reduce the frequency of observation was a proper one in the circumstances. It also contends that, had there been more staff on duty at the time, it would have made no difference to the management of Mrs. Freeman's care.
In a letter to me, the health authority's chief executive said:
"It is the Trust's view that the staffing level on the night of Mrs. Freeman's death was deemed to be acceptable by the sister in charge of the evening shift, and the trained nurse in charge of the night shift considered the staffing levels adequate for the patients under her care at the time. That view is shared by the Trust's Chief Nurse."
He also said:
"at no time has the Trust advised the Health Authority of an inability to provide a safe service, although it would be fair to say that the Trust had requested funding to improve the quality of nursing cover above the current level."
I view those claims with considerable scepticism. Can it really be the case that extra staff would have made no difference at all? Why was the decision taken to reduce observations of Mrs. Freeman to only once every four hours? If the trust is confident that it is providing a safe service, why is it requesting funding to improve the quality of nursing cover?
I do not want to dwell too much on individual cases, but the cases have revived concerns that have been around for some time, about the total number of nursing staff on duty at any one time and the heavy use of agency and bank staff. The local community health council, to which
I pay tribute for its concerned but balanced role, has raised concerns over a two-year period; I have expressed concern about the level of nursing staff in the past; and

many local people have spoken out, often through the columns of my local newspapers, the Herald and the Argus.
Perhaps most worrying was the district audit report produced by the Audit Commission last September. I have retained a copy. The main conclusions are summarised as follows:
"the Trust has on average significantly fewer nurses than other Trusts calculated on a like-for-like ward basis. While quality is being given an increasing emphasis, the lean staffing levels doubtless limit the quality of care that can be delivered to patients."
The report goes on to talk of
"staffing more than 10 per cent. lower than is the norm elsewhere … Eastbourne has 65 fewer nurses in post on these wards than the average elsewhere."
In fairness, I should say that, at each of the inquests, the coroner recorded a verdict of accidental death, but we know that there are limits on the extent to which a coroner can apportion blame or indeed engage in detailed investigations. It may be that those were in truth tragic accidents that would have occurred in any case, whatever amount of nursing care was available, but I continue to be troubled by the expert evidence that has been adduced as well as by the fact that the concerns are not new.
What action is being taken in the light of those findings and events? The trust and the health authority have challenged the findings of the audit report. Investigations were carried out after the two fatalities. The hospital's patient services director is reviewing her original investigation into the death of Mrs. Freeman in the light of the independent expert evidence at the inquest. The health authority has engaged the services of a former regional director of nursing to advise it.
I welcome the fact that the south-east region of the NHS executive is carrying out an investigation. There is to be a report to the primary care group meeting on 21 June and to the health authority on 24 June.

Mr. Norman Baker: My constituents, half of whom are also served by the DGH, view the situation seriously. While they endorse the good work done by the nurses, they are very concerned by the incidents that the hon. Gentleman has mentioned. They are concerned about why those incidents happened and why they were not picked up earlier. Does he agree that serious questions need to be asked about the shortage of nurses at Eastbourne DGH and about the competence of the management? I assure the hon. Gentleman that, although we belong to different parties, I am willing to stand shoulder to shoulder with him on this issue of great importance to my constituents.

Mr. Waterson: I am grateful to the hon. Gentleman for that and I agree that there are serious questions to be asked. I intend to ask some of them shortly. I have received an update on nurse recruiting from Mr. Clive Uren, chief executive of the trust. He tells me that, of the 47 vacancies that exist, 18 have been offered to newly qualified students and a further 17 have been offered to, and accepted by, external candidates. They have offered 22 posts to overseas nurses and, in addition, a group of 19 Eastbourne student nurses will qualify in September. That is fine as far as it goes, and those figures relate to the current establishment for nursing staff.
We all know that there is a national shortage of nurses, and that problem is not limited to Eastbourne. I received a briefing for this debate from the Royal College of Nursing that states:
"The RCN believes that this tragic case illustrates the potential dangers of inadequate staffing levels in hospitals, and thinks that there are some important lessons to be learnt."
It also refers to its snapshot survey of 55 medical wards in September 1998.
1 hope that we shall hear from the Minister what the Government are doing about the general problem. Is enough being done about nurses' pay? Why is only one nurse in 15 receiving the higher level of pay settlement? Why have some still not received it? Why will most nurses still be £53 worse off under this Government than at the time of the last election?
In a parliamentary answer in April, the Minister of State, Department of Health mentioned a figure of £16.5 million that would be made available for the Sussex education consortium, but how many new nurses will that mean? It seems curious that Eastbourne DGH is going as far afield as Canada to recruit nurses, but only recently I had in my advice surgery two local young ladies who are unable to obtain the funding to qualify as nurses.
In their attempts to return waiting lists to where they were when they took office, the Government have put enormous pressure on dedicated NHS staff and risk skewing clinical priorities. Such measures must be matched by appropriate resources, and that is the key issue. I ask the Minister for that commitment tonight.
We are faced with two particular tragedies, and I make no apology for dealing with them in detail. There is a concern in my constituency and those of my neighbouring colleagues about what is happening at the DGH. The plain fact is that the staff who work there are committed to providing a caring, effective service to their local communities, and they should be praised and respected for that. However, as I have said, they are under intense pressure and there is a danger, given that pressure and the level of staffing—especially at night—that mistakes will happen and things will be overlooked.
I ask the Minister to address the question of nurse recruitment and to say how he views the future of the DGH. How will he address and solve the obvious problems? I also extend to him a personal invitation to come and visit my local hospital to see for himself the pressures on the staff and the excellent care that they deliver under difficult circumstances.

The Parliamentary Under–Secretary of State for Health (Mr. John Hutton): First, I congratulate the hon. Member for Eastbourne (Mr. Waterson) on raising this subject tonight and on the constructive tone of his remarks. I am especially grateful for the praise that he extended to the staff at Eastbourne district general hospital, to which the hon. Member for Lewes (Mr. Baker) also referred. There is no doubt of the staffs commitment to the well-being of the patients in their care.
In addition, I should also like to offer my sincere condolences to the families of Mrs. Freeman and Mrs. Dyer on their sad and tragic loss.

Mr. Wardle: Does the Minister appreciate that what Mr. Freeman wants as an enduring tribute to his wife is

to ensure that the lessons to be learned from her tragic death will be used to make a real difference for other women who go into hospital for the same operation? As Mr. Freeman said:
"If you can't provide the package, you shouldn't start the project."
He asks that much more be done to guarantee, as far as possible, that the mistakes that took away his wife's life are not repeated.

Mr. Hutton: I certainly endorse those comments, and I shall say more about both cases in a moment. The hon. Members for Eastbourne and for Bexhill and Battle (Mr. Wardle) spoke movingly about the grief experienced by both families, and I want to associate myself with those remarks.
I am sure that the hon. Member for Eastbourne will agree that, overwhelmingly, most patients who use the NHS receive safe and effective treatment and care. However, I accept that we need a culture of openness in the national health service that acknowledges, highlights and responds to problems effectively and quickly.
That is why quality is at the heart of the Government's strategy for modernising the national health service. In July last year, our consultation document entitled "A First Class Service: Quality in the New NHS" was published, and we were very encouraged by the response that it received. Good progress is being made in putting the proposals into practice and we are already seeing attitudes and priorities begin to shift.
For example, guidance was published in March on the new framework for clinical governance, and arrangements are being put in place across the NHS. That will bring a fundamental shift in the culture of the NHS to one that has quality of care at its heart. For the first time, quality will be enshrined in statute and the responsibility of NHS trusts and primary care groups will be reinforced with a new statutory duty of quality, framed in such a way to provide meaningful support to the continuing improvement of quality. A senior clinician will be responsible for quality for each health authority, trust and primary care group. Those clinicians will produce reports on quality in their respective organisations, and the first clinical governance reports will be published in April next year.
In addition, the Health Bill currently being scrutinised in Standing Committee contains provisions to establish the Commission for Health Improvement. The commission's job will be to monitor quality standards and to intervene promptly, if necessary, when things are going wrong. The commission will be established later this year, and begin its first full-year work programme in April next year.
An NHS performance assessment framework has been published for use by the NHS over the coming year, and will be followed soon by the first set of high-level performance indicators. The National Institute for Clinical Excellence came into being on 1 April, and the first two national service frameworks will be published later this year.
Those points summarise the action that the Government are taking. Once the Health Bill becomes law, NHS trusts will be obliged to have in place systems to monitor and improve both the quality of treatment that patients receive and the outcome of that treatment. The measures should go a long way to ensuring that the constituents of the


hon. Member for Eastbourne can continue to have confidence that the services provided in Eastbourne are safe and of high quality.
The hon. Member for Eastbourne raised the subject of the recruitment and retention campaign for nurses, and I shall address my remarks to his concerns. The Government's target is to have enough nurses to provide the treatment that patients need. Our campaign to recruit up to 15,000 more nurses over the next three years has got off to a very good start. Since we set up our telephone hotline on 1 February, we have had over 53,000 calls from people interested in a career in nursing, and about 5,000 have been from qualified nurses who are showing an interest about returning to nursing. By the end of April, 650 had actually done so.
On 5 March, my right hon. Friend the Secretary of State announced additional funding of £5 million specifically to support return to practice initiatives in 1999/2000, focusing on getting former nurses back to the NHS. This builds on the similar initiatives already in place following funding of £4 million last year. In Eastbourne, 125 inquiries have been received as part of the return to practice initiatives since May 1998. That has resulted in 35 applications, of which to date 20 have been appointed to posts within the trust.
We have taken the first steps to persuade former staff to return to the NHS, and we must keep staff. We will do that by valuing their contribution and recognising that quality of care for patients goes hand in hand with quality of care for staff. On 1 April 1997, the total nursing establishment for Eastbourne Hospitals NHS trust stood at 790. Through additional funding provided under the winter pressure initiatives, the number increased to 811 on 1 April 1998 and to 833 on 1 April 1999, an additional 43 nurses in total.
On top of that, other initiatives are being taken by the trust. Eastbourne district hospital has made significant progress in increasing the number of full-time nursing staff. At the end of March 1999, the trust reported 47 whole-time equivalent vacancies, as the hon. Member for Eastbourne said. Since then, a number of appointments have been made. Eighteen have been offered to newly qualified students and another 10 to overseas staff nurses. With other external appointments, the trust predicts that vacancies will be reduced to approximately 12 whole-time equivalent vacancies at the end of June.
Further efforts are being made by the trust to fill vacancies with a major recruitment initiative abroad, and a further group of student nurses is due to qualify in September. The trust is making significant progress to ensure that use of bank and agency nurses is kept to the minimum. However, as the hon. Gentleman will be aware, that does not address the findings of the district auditors, that Eastbourne was below the average on its complement of nursing staff.
Following receipt of the report, a detailed action plan was agreed between the trust and the auditors to address the issues raised in the report. East Sussex, Brighton and Hove health authority, as purchaser of the services provided in Eastbourne, conducted its own review of the report, and the trust and the health authority agreed to conduct a joint analysis of current nurse staffing levels. The discussions continue, and any recommendations will

be considered by Eastbourne Downs primary care group, which is responsible for advising the health authority on the commissioning of hospital services for its patients, at its public meeting on 21 June. The health authority will consider the matter on 24 June. In the mean time, it is the responsibility of the local trust management and doctors to ensure that services are provided in a safe environment.
Over the past 18 months, we have provided Eastbourne Hospitals NHS trust with an extra £5 million of additional resources over inflation. The additional money includes £1.7 million on the waiting list initiative, £1 million for emergency activity and more than £500,000 for winter pressures. The money has enabled the trust to open more than 20 additional surgical beds and has enabled two five-day wards to be extended to seven-day wards. The money has also allowed the trust to recruit additional nurses to manage these wards together with the full range of supporting staff.
I would like to turn to the tragic incidents raised by the hon. Members for Eastbourne and for Bexhill and Battle that occurred over the past year at Eastbourne district general hospital, and I should briefly explain the action taken by the trust.
Mrs. Freeman died in early 1998 following complications resulting from a hysterectomy operation. Following this tragic incident, the trust investigated the circumstances leading up to Mrs. Freeman's death. Following publication of the coroner's report, in which the verdict of accidental death was recorded, the trust agreed to reinvestigate the matter in the light of the comments made at the inquest and in the professional reports of independent witnesses. The review is in progress and the results are expected to be presented at the public part of the trust's board meeting on 18 June.
In the case of Mrs. Dyer, who sadly died earlier this year, the trust again conducted an internal inquiry into the death and is currently reviewing its resuscitation policy to ensure that the tragedy should never be repeated.
However, even with the work that the trust has done to ensure that these events are never repeated, and despite the reported views held by the Eastbourne, Seaford and Wealdon community health council
"that the very great majority of people treated at Eastbourne achieve a perfectly acceptable clinical outcome and have a satisfactory hospital experience"
there is obviously continued local concern about service provision.
With that in mind, senior officials from the south-east regional office of the NHS Executive visited the trust last Thursday to discuss these events. Following the meeting, and after careful consideration, the regional director has asked the regional nursing director to carry out a review of nursing care at the trust.
The review will provide the regional director with an objective assessment of the current position and provide recommendations that will form the basis of an agreed action plan for the trust. It will also take account of current work being undertaken by the trust and the health authority. However, I can assure the hon. Gentleman that its members will be completely independent from both the trust and the health authority.
The purpose of the review will be to assess whether the trust has in place appropriate policies and procedures to enable effective nursing care to be delivered. The review will also determine what quality standards are in place, including robust nursing policies and procedures supported by staff training, and assess whether these are monitored effectively. It will also assess the adequacy of investigation, documentation, reporting and follow-up of untoward incidents and it will consider, in the light of all of the above, the trust's progress in implementing the clinical governance agenda.
Further details, announcing the terms of reference and membership of the review team, will be issued by the south-east regional office in the near future. I can assure the hon. Gentleman, his hon. Friend the Member for Bexhill and Battle and the hon. Member for Lewes that the review will be open and fully accessible. Its full report will be published by the end of September.
I hope that what I have said in the House today shows that we take quality issues seriously and that that is at the heart of the Government's strategy for modernising the NHS. Let me reassure the hon. Gentleman and his constituents that the Government are taking, and will continue to take, action to ensure that the highest standard of care is delivered throughout the national health service. Nurses have a crucial role to play in that. For that reason, more nurses are being recruited, both in Eastbourne and in other hospitals throughout the country.
We want the public to have full confidence in the local NHS. By taking action to raise the quality of care and by responding to local concerns in the way that we have, I hope that the hon. Gentleman can be confident about our commitment to the NHS in his constituency.

Question put and agreed to.

Adjourned accordingly at seventeen minutes past Eleven o'clock.